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UK Tax Advice needed on a second income?

Discussion in 'Business & Tax Advice' started by -s3c-, Apr 3, 2011.

  1. -s3c-

    -s3c- Junior Member

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    I have started making money decent money through Clickbank for the last two months but I also have a full-time job. How do I go about paying tax on earnings in the UK?

    Do I need to register with HMRC as sole trader or just setup a limited company?

    I really have no idea and don't want to be arrested for tax evasion as I already have ongoing legal problems.

    I have cheques from my current earnings but have not deposited them in my bank account yet because I am not sure how to proceed?

    Thanks
     
  2. Drood

    Drood Newbie

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    Hi
    I own 2 UK limited companies and trained as a UK lawyer and accountant (just so you know I'm not misleading you).

    Good decision not to try and hide the second income!

    I suggest you call a local frm of accountants and ask for an intital interview regarding becoming a client. They won't charge for this - they want you to become a client!

    They will give you the best advice and anything I say further is superfluous.

    But you have 2 choices as you suspect - be a sole trader (if so tell HMRC what you are doing and set up a separate current account with a bank to bank those cheques - if you have few business expenses then just open a savings account instead where you'll get best interest rate).

    Setting up a UK company can be done online for as little as £14.99 - friend did it last week - ltd companies protect personal assets from debtors, but internet marketing rarely has that problem as we don't buy stock etc - main advantage of a limited company is saving tax.

    This financial year you can draw £586 per month from the company in salary and it is under the tax limit for NICEE, NICER and Income tax -so no tax to the govt!!

    If you want more than that then you take it out as dividends (only 10% tax). Don't worry if dividends sounds technical just take the money out and tell the accountants at the end of the year that anything over the £586 pm is to be treated as a dividend.

    The company will pay tax on profits at the small companies rate... here I think I'll leave it to your accountant to take over - those are the main points.

    If you're selling products you may have to watch turnover - if it exceeds the VAT registration limit (approx £69k) then you'll have to register for and charge VAT. Again professional advice needed there. OK? :)

    Good luck with the business - sounds like I need the luck more than you though :)
     
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  3. wholesalereplica

    wholesalereplica BANNED BANNED

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    just dont hide it and you will be fine