Budgeting for tax?

[litwardle]

Hi all,

I have just started a small training/consultancy business as a sole trader. I'm currently setting my rates but not sure how much to set aside for tax? I have a couple of guaranteed contracts for the year and gross profit will be around £34k for the year. (I have no set up costs so profit based on my time minus expences (vehicle, fuel, accommodation etc.)

I have a meeting set up with accountant next week but need to set some rates for a meeting this week and I'm worried I might not build in enough to cover tax.
I've searched the forum but haven't come up with anything so apologies if this has been asked before!

Kind regards

Lee

[Williams lester]

On profit of £34k you would pay approx £5,500 tax and £2,300 NI, you will also need to make a payment on account of 50% of the following year's tax.

The above assumes you have no other income.

[elainec100@cheapaccounting]

you say £34k gross profit - what about net profit?

I would also suggest discussing a limited co with your accountant - at this level of profit there many be benefits

[MyAccountantOnline]

Hi all,

I have just started a small training/consultancy business as a sole trader. I'm currently setting my rates but not sure how much to set aside for tax? I have a couple of guaranteed contracts for the year and gross profit will be around £34k for the year. (I have no set up costs so profit based on my time minus expences (vehicle, fuel, accommodation etc.)

I have a meeting set up with accountant next week but need to set some rates for a meeting this week and I'm worried I might not build in enough to cover tax.
I've searched the forum but haven't come up with anything so apologies if this has been asked before!

Kind regards

Lee

Hi Lee

As a soletrader you'll pay tax at 20% on that level of income if you have no other taxable income and you'll also have to pay 8% Class 4 National Insurance on profits above £5715. That will give you some rough figures to work on.

You may be able to pay less tax operating via a limited company as Elaine as mentioned so do ask your accountant next week if they dont mention it.