part time job while funding a start up

[w0gga]

Hi all, what are the implications of having a part time job while starting a business ''Tax wise? I pay tax on my part time job and wondering if my tax will go up as a result of another income.

Thanks

 

[elaine@cheapaccounting]

yes if you have other income or profit from a business you are likely to pay more tax

 

[w0gga]

Thanks, for the first year no personal wage will be taken from the business so this shouldn't be a problem then? Only if we pay a wage to our selfs

 

[elaine@cheapaccounting]

Thanks, for the first year no personal wage will be taken from the business so this shouldn't be a problem then? Only if we pay a wage to our selfs

nope - you pay tax on profits

 

[w0gga]

Understand we pay tax on profifts but if we don't take a wage from the profits and leave the money in the bank this would have no effect on the part time job tax payment meaning my tax payments would only be that from my employers and stay the same?

If we take a wage this would then effect my employment tax :|

 

[Faevilangel]

Understand we pay tax on profifts but if we don't take a wage from the profits and leave the money in the bank this would have no effect on the part time job tax payment meaning my tax payments would only be that from my employers and stay the same?

If we take a wage this would then effect my employment tax :|

No, you are confused... You're taxed on the profits from the business... You could withdraw 100% of the money and still pay the same tax as leaving the lot in there.

Personal job = £10k wage
Business = £20k earnings - £5k profit

You would then pay tax on the £10k + £5k (minus the personal tax allowance).

 

[elaine@cheapaccounting]

Likely that the personal allowance has been used in the employed job.

If you are self employed you will pay tax and class 2 and 4 national insurance. The rate of tax depends on your other income.


If you are a limited company there will be corporation tax on the profit.


The tax on your part time job remains unaffected - you will need to complete a self assessment to declare your other income.


I think you would need an accountant to help you. Good luck

 

[w0gga]

With you now, thankyou