Starting up in business

[anitajayne]

I am thinking of starting up working from home as a book keeper whilst still working full time for an employer, just wondering what I have to do about paying taxes and how much I will have to pay. Also is there anything else I need to do before I can start?

[newquizzer]

Firstly you will have to pay income tax on all your earnings, less any allowable business expenses. Your tax free allowances will have been used up by your employer.

You will also have to pay 11% National Insurance on all earnings over the threshold (about �90 pw).

Working from home you can offset certain costs against your earnings, check this out.

[auzzie]

I do exactly what you want to do. I am employed and also freelance as a bookkeeper. You have to register your self employment with your local tax office. At the end of the year submit your accounts and you will pay tax in two instalments. If you are earning over the PAYE limit on your employment (which, as you are full time, is very likely) you will have no allowances to cover any of your self employed income and all your PROFIT will be taxed in full. Depending on how much you do in your self employment, it might be worth considering having your employment taxed at the basic rate. You will therefore have paid some of your tax before the end of the year. My income as self employed is significantly higher than employed, BUT i am only part time!! I would certainly make sure that you save enough to pay your tax bill. Put it in a saving account, get interest on it before you pay it over. If you are a good bookkeeper, you will not be short of work!

[Eejit]

I don't know where you live but in my area (Northampton) you can phone your local tax office and book to go on day courses which cover things like this. I found them really helpful. They even came out to my house because I couldn't get a baby sitter. They bought sotware with them so you can do payroll without buying a package. Any questions you need to ask you can ask them and if it isn't covered in your course they will tell you what cousre to go on. All free of charge!