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How do I pay me if I am employed & self employed?

How do I pay myself if I am employed and also self employed?

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Hi there,

I am employed on a part-time basis and earn gross £12,285/year

I have also set up a limited business on the side where I can afford to pay myself £6800 gross/annum after expenses.

How do I go about paying tax on this? I'm assuming I just pay 20% on anything I earn after £12500 in addition to my employed role? I.e. the first £215 of self employment is free and then 20% on the remaining £6585?

I already pay NI through my employed job.

Replies (40)

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By Tim Vane
16th Jun 2019 16:36

Posting one question without most of the important facts is carelessness. Posting the same question a day later after ignoring all the responses is just utter ignorance and stupidity.

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Replying to Tim Vane:
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By Daybooks
16th Jun 2019 23:43

Woah... you’re not very nice are you? (there was a technical glitch. I didn’t get to view the answers on the original post until today. I hope you feel suitably silly for being so nasty now)

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Replying to Daybooks:
By Tim Vane
17th Jun 2019 02:45

Daybooks wrote:

Woah... you’re not very nice are you? (there was a technical glitch. I didn’t get to view the answers on the original post until today. I hope you feel suitably silly for being so nasty now)

You show an incredible level of arrogance, ignorance and technical ineptitude and I’m the one that should feel silly? Nice one Richard!

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By paul.benny
17th Jun 2019 10:30

Mr/s Daybooks - if you had made clear your reasons for repeating the question, I doubt that Mr Vane would have called you out. There was no way he could have known about your glitch and there's no reason to hit back.

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By Daybooks
17th Jun 2019 16:59

There was no need, ever, to call me stupid and ignorant (even if I am). Getting personal with people you don’t know is just childish and weird

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By paul.benny
18th Jun 2019 09:24

Mr/s Daybooks - I think you may have responded to the wrong poster. I did not make any personal statement about you.

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By Daybooks
18th Jun 2019 09:35

You wrote a comment about Mr Vane and I was responding about Mr Vane

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By JCresswellTax
18th Jun 2019 09:43

Call him Mr. Raider, call him Mr. Wrong, call him Mr. Vain

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By jcace
16th Jun 2019 23:14

When you say "a limited business" do you mean a business trading through a limited company, or a small business that is limited in its scope, but which is not a limited company? The way in which you trade (limited company or not) will determine how you are taxed.

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By Daybooks
16th Jun 2019 23:45

The former - a limited company

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By penelope pitstop
17th Jun 2019 00:26

Complicated!

Very complicated!

It could take reams of pages to explain the tax and NIC position in full.

Unfortunately, as an accountant, I need to earn some money to make ends meet by answering similar questions to this to my fee-paying clients.

Sadly you may have to wait for an accountant who has little to do to explain all the nuances your question poses.

Alternatively, you could engage a local accountant who, for a small fee, will do a sterling job explaining all the intricacies to you.

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RLI
By lionofludesch
17th Jun 2019 08:38

Another satisfied customer. ©

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Hallerud at Easter
By DJKL
17th Jun 2019 09:42

I'm shocked nobody has suggested a company pension contribution as a possible option. Depending upon the age of the individual one might save a little tax routing remuneration through such a beast.

And there lies the problem with such questions on A Web, without sitting down with the individual to gather information it is really pretty impossible to optimise planning and structure , even with such a basic business as we have here.

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By Tax Dragon
17th Jun 2019 09:57

Who said it's a basic business?

t/o £1,000,000, expenses (and other requirements) £993,200 (with a further £1k for the year end compliance pending) sounds quite other than basic to me!

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Replying to Tax Dragon:
Hallerud at Easter
By DJKL
17th Jun 2019 10:15

Well, I was working from an understanding from the other thread on 16/06/2019 at 18:27

"Well in one year £7800 will be paid into the company by one client. After running costs, the company is left with £6800 which I would like to pay to myself as a wage if that’s the most sensible option"

https://www.accountingweb.co.uk/any-answers/how-do-i-pay-me-if-i-am-empl...

However does not change my point, in fact it reinforces my point if there is more to the business than this, that A Web is a poor platform for these sorts of questions which potentially have too many moving parts and differing interpretations.

The other thing the OP maybe could consider is a status review of the agreement with the sole client/customer, given the figures supplied it does look like it is probably a service oriented company.

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By Tax Dragon
17th Jun 2019 10:43

DJKL wrote:

...does not change my point, in fact it reinforces my point... that A Web is a poor platform for these sorts of questions which potentially have too many moving parts and differing interpretations.

I agree... I think all of us agree. (I was chucking you some free grist.)

It's completely off topic, but I really wonder about the economics. If the eyes really have it, the readership of this forum is a tiny fraction of what it was just a few years ago. That surely is in part, maybe in large part, because of the plethora of questions such as this, which are as unsuitable for this forum as this forum is for advice of the nature requested.

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By Vile Nortin Naipaan
17th Jun 2019 14:18

Yep. Let's just round it to £1,500 though shall we. If you leave it in a brown envelope by the Joy of Life fountain in Hyde Park, I'll take care of it for you.

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