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Self Employed whilst Remaining Employed Tax

Discussion in 'Business & Tax Advice' started by TheMoneyWizard, Apr 4, 2015.

  1. TheMoneyWizard

    TheMoneyWizard Elite Member

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    Hi everyone,

    I'm from the UK and as the title states, I'm self employed whilst still employed.

    Now I've never really made enough through IM to have to worry about BS tax rates.

    Now unfortunately I do, but I'm a little confused and annoyed. It's so hard to find two sites that give the same info, I just want a definite answer.

    I'm sick of paying tax on my current job, I hate seeing my money being given to pregnant women on the dole, it angers me. Yet I don't complain. However, I won't give them 40% of my IM earnings, simply put they can fuck right off. Now I'm not a tax dodger, I'm already paying tax on my current job, so don't get angry thinking that I dodge tax, I still pay it but I refuse to pay it on my IM earnings as well. Maybe I wouldn't refuse to pay it if it wasn't 40 fucking percent.

    Am I definitely correct in thinking this is correct:

    "any income over £41,450 will be taxed at the higher rate of 40%"

    Is this is as well as my usual income tax from my current job?

    So what's a good way around it or a good way to lower the 40%? I've heard about setting up a LTD but it seems like a lot of work for the average person.

    This may seem like a bit of a silly question but if I stored this money in my PayPal account and then spent bits of it on things (but don't ever withdraw any of it, my bank details are attached to the account) could the bastards find out about this?

    It just seems a bit extreme, I mean what's the point of me earning anything if they're going to take 40% of my IM earnings? Should I sit around on dole, is that what they want? (this is a joke btw :))

    Any answers are appreciated.
     
    Last edited: Apr 4, 2015
  2. Sunday Lunch

    Sunday Lunch Junior Member

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    It takes 10 minutes to set up a limited company online.

    It will take an hour to see an accountant who will set you up for VAT (if it looks like you will turnover more than 82K), the accountant will cost you about 2K a year (cheap one).

    The accountant will pay you in dividends or recommend you reinvest your earnings, either way you will end up paying 20-25% tax, IMHO.
     
  3. neu009

    neu009 Senior Member

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    Go see an accountant, nobody will give you real advice online. Alternatively read all you can as it is all based on tax code you can usually get a good idea and just be left with 1/2 real questions vs. what should I do.
    Don't know the UK tax code but given you are sole member LLC(basing on US tax code) there could be either pass through or coproration taxation. Pass trough comes with the same taxes (after deducting expenses etc) as sole proprietorship does but so easy you can do it yourself. If you elect to be taxed as corp you can save some taxes but will need to do payroll, real tax return etc. and have to weigh in whether its worth it for you.This is no tax advice,just my opinion. Go see an accountant! Most even do a free initial consultation. So if you can ask them 1 or 2 specific questions vs. what is the best, you should be good. Good luck
     
  4. hopon

    hopon Newbie

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    Setting up a uk company is quick cheap and easy and will allow you to shelter income and just pay 20% corp tax. For a sideline business presumably you shouldn't have too many transactions and so the fees shouldn't be too steep-say £1k. It depends on how much you're earning both employed and sideline as to whether you think its worth it.

    Any more q's I'll answer where possible-I am an accountant....