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Already got a 9-5 job on £17.5k. Want to run a business on the side...

Discussion in 'Offline Marketing' started by xtrapsp, Oct 6, 2014.

  1. xtrapsp

    xtrapsp Newbie

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    As the title suggests, what legal precautions should I take? Do I need to register a business if it's earning less than 5k but I am earning 17.5k in my other job?

    Potentially I'l be earning £300 per month extra. I know this £300 needs to be verified with the tax man but I have no idea how! and how is it monitored if I take cash in hand?!

    That is all :)

    Thanks
     
  2. ardley216

    ardley216 Elite Member

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    Well, I'd play the 'ignorant fool', just earn the money and not pay tax, then if tax man comes knocking, make sure you DID NOT spend what tax you were supposed to pay, then pay it off :)

    I do run my earnings through a limited company, the best thing is, in the UK when you claim dividends at the end of the year, you get 10% tax credit :) although corporation tax is 20%.
     
  3. xtrapsp

    xtrapsp Newbie

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    I've never had to pay dividends before (Not sure how! 21 years old and moved out a year ago). Not sure how this works! I also earn a bit on the side as it stands from donations from where I livestream ($50 a month).

    Just wondering how these fall into place.

    Thansk for the post :)
     
  4. acotut

    acotut Elite Member

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    So you earn 17.000 pounds/month,but you want to create a business in order to get an extra 300?
    Sounds fishy
     
  5. pathart

    pathart Senior Member

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    per year I'd imagine.

    Personally I'd never mess with the taxman.
     
  6. meathead1234

    meathead1234 Moderator Staff Member Moderator Premium Member

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    Call your local HMRC office - you'll likely just need to register as self-employed and fill out a self-assessment tax form. It's pretty easy and as you'll only be earning £5k a year extra you will likely be able to get down your tax liability with expenses to offset it.

    I would not recommend playing ignorant. You may well get away with it, but for the sake of a few hundred a year in tax, it's best to avoid issues, as if you ever start earning more it could get messy.

    He means £17.5k annual salary, not monthly.
     
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  7. LostConnection

    LostConnection Senior Member

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    The perk with doing what meathead suggests, is that being self-employed allows you to run the business more easily, because of the lack of requirement to file all the company paperwork and such. And you don't have to pay 20% corporate taxes on the company's income, and then taxes for your income (This is why Ardley mentioned the dividends).

    For an extra £300 a month, self-employed would be the best option for you. However, a limited company also limits your liability in a case of bankruptcy and responsibility to your clients. If you invest a thousand pounds into it, you will only be responsible for that amount of money, where as a self-employed you are also putting your house and 9-5 salary on the line. This is something you should consider.

    The £300 pounds might not make it worth starting an Ltd., but if you scale it up, a limited company will protect you and your belongings better.

    The tax basics can be found here: http://www.hmrc.gov.uk/incometax/basics.htm

    You might also wish to look into consulting with an accountant, they know their stuff when it comes to minimizing taxes and setting up companies. Also, lawyers like me (in a year or two) charge way more than they do.
     
  8. GoTRooT

    GoTRooT Jr. VIP Jr. VIP

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    You are clearly in England, let me tell you I fucked up my tax once years ago when I lived there and got a call from my mailing address when the bailiffs turned up to it for a bill well under 1000 while at the same time being owed a few K in re-bait.

    Do not fuck with the british taxman unless you know exactly what you are doing, in the UK you need to be earning a shit load before the tories allow you to go tax free and the system is designed to fuck over anyone earning less than 120K.
     
  9. xtrapsp

    xtrapsp Newbie

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    Not sure why you have to make an assumption and then try and justify why it's bad? It only sounds fishy because you're mistaken.



    Agree'd, I won't mess with the tax man


    Sounds like a plan :) Thanks


    Thanks for the tip Lost, I'l have a look into an accountant.
     
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