Payments on Account (Something different maybe?)

Bryn B said:

I am currently employed full time, but i am also a sole trader with a small supply & installation business (Not VAT registered)

I set up the business about 5 years ago, mainly as a way of boosting income, and also the company i was working for was looking a little bit dodgy due to financial difficulty, so i was trying to safeguard my future.

So far each year earnings have given approximately £3000-£4000 profit, however this year i have the opportunity to consult on and carry out a large body of work in July, which will earn the business about £37,500, potentially giving about £20000+ in profit. This will be a one off, and expected earnings will reduce down to normal levels next year.

First of all, this £20,000+ added onto my normal employed salary of £33,000 will take me well over the Earnings level for upper rate tax, secondly i obviously have the issue of Payments on Account for the business. I know i can reduce payments on account, but does it cause any other complications given the above scenario?

So far my book keeping has been very very simple, but i feel this is going to give me one huge headache.

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Bryn B said:

I am currently employed full time, but i am also a sole trader with a small supply & installation business (Not VAT registered)

I set up the business about 5 years ago, mainly as a way of boosting income, and also the company i was working for was looking a little bit dodgy due to financial difficulty, so i was trying to safeguard my future.

So far each year earnings have given approximately £3000-£4000 profit, however this year i have the opportunity to consult on and carry out a large body of work in July, which will earn the business about £37,500, potentially giving about £20000+ in profit. This will be a one off, and expected earnings will reduce down to normal levels next year.

First of all, this £20,000+ added onto my normal employed salary of £33,000 will take me well over the Earnings level for upper rate tax, secondly i obviously have the issue of Payments on Account for the business. I know i can reduce payments on account, but does it cause any other complications given the above scenario?

So far my book keeping has been very very simple, but i feel this is going to give me one huge headache.

Click to expand...

Bryn B said:

Strange isn't it that such a large amount of money can cause a headache, however all i have done is worry about it since i was given the opportunity to earn it. Not actually about the money, more about the one off hit of moneys impact on my earnings next year, and tax obligation etc.

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