Starting up a mobile business- tax question

[nicola90]

Hi,

I'm looking to start up a mobile business in the summer (training as a nail tech atm), and just making a list of things I need to do, eg bank accounts etc. I'm not planning on registering with VAT, as I won't be making sales of £70,000 or more at least the first couple of years (after that who knows?!?) but I have a question for mobile therapists out there.

Do you pay yourself a set wage each month out of your profits? And if so, can you take dividends from the profit if needed, and will this be taxed? I understand a fair bit about business, as my current job involves a lot of VAT based work, but I'm unsure about PAYE and the other types of tax. I was planning on paying myself a wage, then completing a tax return each year and paying my income tax then. Will this be sufficient, or is there another tax I need to consider? Also, who have you found to be the best for business banking?

Hope that makes sense anyway, and if anyone can clear it up for me I'd greatly appreciate it!!

Thanks,
Nikki x

 

[SJK]

Assuming you're self-employed, you can pay yourself a wage each month from the business but this will not count as a business expense. At the end of the year, the business profits will be taxable using the return.

 

[nicola90]

Ah thank you! Got another question (sorry!) that maybe you can answer? I've looked on the business link website, and as I will be a sole trader not operating through a limited company I don't think I'll have to pay corporation tax. Does that mean the only tax I'll pay will be NI and PAYE on the wages I pay myself or is there another tax I've missed?

Sorry again for asking so many questions, hopefully one day I'll be able to answer some questions on here

Nikki x

 

[SJK]

That is correct. Limited companies pay corporation tax. The self-employed and employed pay PAYE and NI. Good luck.

 

[nicola90]

Thanks so much for all your help. I have a feeling I'll be having business link on speed dial as my start up date gets closer!