Tax Question - Help!

[GlitteryWings]

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.

[Buenchico]

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.

[Buenchico]

This might be relevant:
https://www.gov.uk/set-up-business-partnership

Have you registered the partnership with HMRC? (You could get hit with penalty charges if not).

[GlitteryWings]

Thank you very much!!!

[GlitteryWings]

Yes its registered :)

[GlitteryWings]

We are both full time employed

But then self employed second income- confusing us

[xenoblast]

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.

[Buenchico]

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.

[Peter Pedant]

// Maybe the services of an Accountant would be a good investment for the first few years of trading.//

best advice

how long has this been going on - wondering if you owe tax? ( you do by the way) - I dont dream of doing any of this without an accountant ....

[Peter Pedant]

// 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