Wanting to set up a sideline...

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H

henryscat

Free Member
Jan 23, 2006
2
0
  • #1
    Hi everyone.
    I'm new to the forums and have a question that I have been dying to ask.

    I'm currently employed full time and earn around 22k a year working in a pre-press department as a team leader.

    I am very interested in photography and design and would like to start my own sideline of selling stock images on mainstream websites (they take a cut of the profit). Then maybe moving on to other things.

    I know nothing about tax returns etc and how it all works! Oh and maths is not strong point of mine.

    How would this extra income be affected by tax?
    Is there a limit to how much I can earn extra before I am taxed?
    Is this little escapade going to be even worth it once the taxman gets his hands on my profit?

    Any advice would be much appreciated as I am very confused due to never exploring this side of things before.

    Thanks in advance!
     
    J

    Jayne

  • #2
    Hi,

    Don't worry the Tax man confuses everyone, except Alpha and Joy on here :lol:

    I think they add any extra earnings onto your wages and you are Taxed on that. The brain boxes will be here soon, to correct me :D

    Oh and welcome to the forum.

    Jayne :D
     
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    A

    Antoinette

  • #6
    henryscat said:
    Hi everyone.
    I'm new to the forums and have a question that I have been dying to ask.

    I'm currently employed full time and earn around 22k a year working in a pre-press department as a team leader.

    I am very interested in photography and design and would like to start my own sideline of selling stock images on mainstream websites (they take a cut of the profit). Then maybe moving on to other things.

    I know nothing about tax returns etc and how it all works! Oh and maths is not strong point of mine.

    How would this extra income be affected by tax?
    Is there a limit to how much I can earn extra before I am taxed?
    Is this little escapade going to be even worth it once the taxman gets his hands on my profit?

    Any advice would be much appreciated as I am very confused due to never exploring this side of things before.

    Thanks in advance!
    Click to expand...

    Hi - it would depend if you set up as a company or if you counted it as just extra income.

    Am a bit rusty on that side of things will find out for you.
     
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  • #7
    Hi Henryscat!

    If you set up as a sole trader, you would be taxed on your income, minus any expenses. Your expenses would fall into two categories, firsly your capital expediture (this is any equipment you buy for your business for example cameras, tripod's, computer software etc - you will be able to claim back 50%of this expenditure, against tax in year 1 and 25% in year 2 etc)

    Then you can claim for all (100%) of your ongoing expenses such as film, printer paper, ink, advertising, mileage allowance, and if you work from home, a portion of you utility bills (in other words 'consumables')

    Once you have deducted all these 'outgoings', you will be taxed on what's left. In your case, if you already have full time employment, then you won't have any tax allowance left (married persons allowance etc), as this would already have deducted from your employment income.

    The Inland Revenue are very helpful (surprise surprise) and I always find it easier to talk to them on the phone, rather than trawl through the mountains of information online.

    hope this helps.
     
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    bwglaw

    bwglaw

    Free Member
    Apr 8, 2005
    4,567
    242
    Richmond, Surrey
  • #8
    married persons allowance
    Click to expand...

    This has been abolished I believe and is now the same as a single person, circ £4800/year

    Self-employed income on top of a full-time income I think he will have to pay Class 4 NI contributions however I am not entirely sure, so I wait to be corrected! ;)

    Not sure whether setting up a Ltd Co would be a tax-effective option to buy the capital items etc and in order toi avoid personal income tax, to pay himself nothing but may fall into the Corporation Tax trap.

    Worth taking advice from an accountant - you guessed I am not one! ;)
     
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    H

    henryscat

    Free Member
    Jan 23, 2006
    2
    0
  • #9
    Thanks all for your responses!
    It would be additional income i suppose but if I am going to be taxed on it after its added to my current wages its probably not worth persuing.
    I intend to go into the Business Advice Shop in my hometown as I have heard they give good advice to noobs like myself.
    We shall see what happens...
     
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    Joyous

    Joyous

    Free Member
    • Sep 11, 2005
    1,165
    87
    Ilford, Essex
  • #10
    henryscat said:
    It would be additional income i suppose but if I am going to be taxed on it after its added to my current wages its probably not worth persuing.
    Click to expand...
    That's not necessarily the case. A percentage of something is better than nothing at all and why not make money from doing something you enjoy.

    By the time you take off your business expenses your tax bill might not be that much plus it's possible to claim a tax refund if you make losses in your first three years of trading.

    Regards

    Joy
     
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    Faith28

    Faith28

    Free Member
    Dec 2, 2005
    2,111
    150
    London
  • #11
    henryscat said:
    Thanks all for your responses!
    It would be additional income i suppose but if I am going to be taxed on it after its added to my current wages its probably not worth persuing.
    I intend to go into the Business Advice Shop in my hometown as I have heard they give good advice to noobs like myself.
    We shall see what happens...
    Click to expand...

    But if you got a raise of £2000, say, that would still be taxed but you wouldn't reject that surely! So why not pursue your interest anyway and as long as you have a positive attitude about going it alone, then I'm sure you will not regret it.
     
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