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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.

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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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to Tim Vane
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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By AW71
to Daybooks
16th Jun 2019 23:46

From this response you seem far too much of a snowflake to be in business.

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to AW71
17th Jun 2019 00:21

Ahahahahaha!! Oh my goodness you lot are hilarious!!! Some of you get so nasty and uptight it’s really weird!! (Wish I was young enough to be a snowflake, I’ll take it as a compliment! Byeeeee!)

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to Daybooks
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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to Daybooks
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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to paul.benny
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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to Daybooks
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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to Daybooks
18th Jun 2019 09:35

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

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to Daybooks
18th Jun 2019 09:43

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

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By AW71
16th Jun 2019 19:22

I say you buy one you get one free.

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to AW71
16th Jun 2019 23:44

It was a glitch

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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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to jcace
16th Jun 2019 23:45

The former - a limited company

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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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By AW71
to penelope pitstop
17th Jun 2019 08:25

Sadly there are several who keep giving their advice away for free on here which is why we keep getting the freeloaders coming for answers.

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to AW71
17th Jun 2019 08:50

If this particular freeloader takes anything from the discussions, it should be that:
1) hiring an accountant would be beneficial
2) Matrix isn't necessarily good at mental arithmetic

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By Matrix
to Tax Dragon
17th Jun 2019 09:20

Eh?

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to Matrix
17th Jun 2019 09:28

The alternative was that you assume too much. And I know you're too shrewd to do that.

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17th Jun 2019 08:38

Another satisfied customer. ©

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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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to DJKL
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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By DJKL
to Tax Dragon
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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to DJKL
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 AW71
to Tax Dragon
17th Jun 2019 12:28

Completely agree, it's a very pale shadow of what it once was. More or less the equivalent of a Facebook group now.

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By Dib
to AW71
17th Jun 2019 13:34

So, how do I post pictures of my cute doggie?

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By AW71
to Dib
17th Jun 2019 13:40

More importantly - what did you have for tea last night?

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By DJKL
to AW71
17th Jun 2019 13:55

Picture of the food no doubt required.

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By Dib
to DJKL
18th Jun 2019 13:26

No, surely not! On the subject, didn't we have a talking t*u*r*d on here once?

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to Dib
18th Jun 2019 15:05

SNAKES ALIVE!

What on earth is a talking "t O u F r I d".

I haven't a clue. But bet if I saw one I would run shrieking for a mile!!!!

Aaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaarrrrrrrrrrrrrggghhhhh.

Godzilla V the talking t*u*r*d.

Now that is a fight I would like to see. Forget Justin Bieber versus Tom Cruise.

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to AW71
17th Jun 2019 16:55

Goodness me you lot are completely nuts! Surely you have better stuff to do?? ☺️☺️

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By DJKL
to Daybooks
17th Jun 2019 17:08

Daybooks wrote:

Goodness me you lot are completely nuts! Surely you have better stuff to do?? ☺️☺️

Its accountancy and tax that does it to you, I say run, run whilst there is still time to save yourself, it is too late for the rest of us.

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By AW71
to Daybooks
17th Jun 2019 17:43

It's something to do for a break from work. Not sure why you're lingering around though like a yapping dog which won't shut up

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to AW71
17th Jun 2019 17:52

Damn, I missed out some canines.

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to AW71
17th Jun 2019 17:01

And you guys are the Facebook trolls .. (I note that there seem to be a small group of you who enjoy dishing out the insults)

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to Daybooks
17th Jun 2019 17:51

Daybooks wrote:

And you guys are the Facebook trolls .. (I note that there seem to be a small group of you who enjoy dishing out the insults)

Have you never read Animal Farm? It's what happens when there is no serious moderation.

DJKL, help me out here... Animal Farm , let's see... we have a sweary pig's sweary cousin, a half-witted dragon, a Subbuteo-playing lion, a Vogon poet, a lonely wolf, a petulant partridge, a smoking penguin, enough trolls to shake a stick at AND half a million monkeys not knowing they might one day reproduce Shakespeare!

Not all of the above offer insults, by the way. (And most of mine are accidental... the half-witted dragon has foot-in-mouth syndrome.)

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By DJKL
to Tax Dragon
17th Jun 2019 18:38

Pretty accurate reflection of the menagerie methinks.

I do not think the OP can really complain, I thought my pension shuffle point with employer contributions might, depending upon age and desire to make future contributions over £10k pa , make sense- 25% tax free, 20% on balance and no RTI scheme needed. On a £6,800 employer gross contribution saves£340 per annum income tax and likely works out cheaper re admin than processing a salary via RTI as in effect the SIPP provider sorts the PAYE- employer contribution one week, crystallise fund next week.

My point re single client and employment review with end payer should also not be ignored by the OP

Given two avenues of thought offered freely to the OP my good deed for the day has now been officially done and I better think about leaving the office now and heading home and the OP ought to think about finding a friendly accountant and having a chat.

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By AW71
to Daybooks
17th Jun 2019 22:35

Methinks you are the type who posts in buying FB groups looking for giveaways rather than paying for something.

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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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