Quizzes & Puzzles1 min ago
Tax Question - Help!
9 Answers
I realise these are dumb questions but could anyone help dumb it RIGHT down for me?
Both persons have a full time job which wages are obviously taxed on.
However I also have a joint business which we need to pay tax on.
1. Because the business makes less than £12,500 a year do I owe any tax? (Or because we both make say £30k a year full time each does that get added on and we pay 20%?)
2. We have never taken a regular wage when building the business up. Should We have or will we loose that all in tax now?
Some months are likely a loss as not always busy.
Wondered if the HMRC would question this because we buy all our stock through the business account, so they will have a track of how many customers we have had/ treatments carried out?
Finding it all really confusing.
Both persons have a full time job which wages are obviously taxed on.
However I also have a joint business which we need to pay tax on.
1. Because the business makes less than £12,500 a year do I owe any tax? (Or because we both make say £30k a year full time each does that get added on and we pay 20%?)
2. We have never taken a regular wage when building the business up. Should We have or will we loose that all in tax now?
Some months are likely a loss as not always busy.
Wondered if the HMRC would question this because we buy all our stock through the business account, so they will have a track of how many customers we have had/ treatments carried out?
Finding it all really confusing.
Answers
Best Answer
No best answer has yet been selected by GlitteryWings. Once a best answer has been selected, it will be shown here.
For more on marking an answer as the "Best Answer", please visit our FAQ.You've already used up your tax allowance, so you have to pay tax on all of your income after that. So the taxman will want 20% of what you've earned from the business (after, of course, deducting all of your expenses).
Whether you take money from the business as a 'wage', or as 'profit', it will still count as taxable income, so HMRC will still need their 20% of it.
Whether you take money from the business as a 'wage', or as 'profit', it will still count as taxable income, so HMRC will still need their 20% of it.
This might be relevant:
https:/ /www.go v.uk/se t-up-bu siness- partner ship
Have you registered the partnership with HMRC? (You could get hit with penalty charges if not).
https:/
Have you registered the partnership with HMRC? (You could get hit with penalty charges if not).
When you do your personal self assessment tax return there are boxes for 'earned income' and boxes for 'Tax taken off from earned income'. There are also boxes for 'earned income from self-employment. and 'earned income from partnerships.' If you are in a partnership you need to do a partnership tax return then add the profit or loss to your personal tax return. Maybe the services of an Accountant would be a good investment for the first few years of trading.
Simply complete your online tax return, answering all of the relevant questions. (The great thing about the online system is that, unlike the paper method, it uses 'filtering' questions which direct you straight to the relevant sections). As long as you answer all of the questions honestly, HMRC will do all of the calculations for you.
// We have never taken a regular wage when building the business up. Should We have or will we loose that all in tax now? //
now it doesnt matter - and it is not a question of 'loss to the tax man' - you have set up a trading operation and there will be tax consequences which arent changed by drawing a wage ( viz wage expenses are not tax deductible for sole traders or partnerships )
you say you have registered a partnership with HMRC but then imply you havent drawn up accts for it ....
you need an accountant
now it doesnt matter - and it is not a question of 'loss to the tax man' - you have set up a trading operation and there will be tax consequences which arent changed by drawing a wage ( viz wage expenses are not tax deductible for sole traders or partnerships )
you say you have registered a partnership with HMRC but then imply you havent drawn up accts for it ....
you need an accountant