View Full Version : Tax Reserve Account
traxor
19th June 2009, 10:21
Okay, I'm not entirely sure if I'm going to make it past the tax threshold for the year, I'm only currently at £1000 takings, which would be about £250 tax if it was going to be taxed, should I have a reserve account ready in case I have to pay it at the end of the tax year (April), or just wait. I don't want to get to April next year, and be un-prepared, but then again, if I don't make it past the threshold, I'll have £1500 in the account that I could've used on other things?
What would your advice be?
Luke
elainec100@cheapaccounting
19th June 2009, 10:29
are you a sole trader?
traxor
19th June 2009, 10:45
Yeah, self-employed. No employees.
elainec100@cheapaccounting
19th June 2009, 11:08
ok you can earn (that is profit) £6475 for 2009 / 2010 before tax - then tax is 20%
But remember Class 4 NI.
8% on profits over £5715 up to £43875 when it reduces to 1%
Work this out and then out it in a reserve account (I suggest an ISA) and don't spent it!
traxor
19th June 2009, 12:25
Okay, so when should I start paying NI? Shall I just keep a running total of what I'm earning so far, because I think I've barely made £100 to be honest...
elainec100@cheapaccounting
19th June 2009, 16:41
are youn register as self employed and payign class 2 NI? You should be.
Class 4 is paid to the same time scales as your tax
traxor
19th June 2009, 17:45
are youn register as self employed and payign class 2 NI? You should be.
Class 4 is paid to the same time scales as your tax
I'm registered as self employed but I have an exemption certificate for national insurance.