The Mudcat Café TM
Thread #127858   Message #2856770
Posted By: Bonzo3legs
05-Mar-10 - 10:28 AM
Thread Name: BS: Soon to become self employed any advice?
Subject: RE: BS: Soon to become self employed any advice?
It's still worth forming a company, as there are tax savings to be made, and you can walk away from it. It's quite easy really - pay yourself a salary up to the amount where National Insurance starts - currently £5,400 or so. This is tax deductable in your accounts. Then take a dividend calculated to take your gross pay up to the amount where Higher Rate Tax starts. There will be no personal tax or national insurance payable, of course Corporation Tax at 21% will be paid on your company profit.

Never bring a car into the company - just charge 40p per mile for first 10k miles and 25p thereafter.

You should use an accountant, you will need to give him bank statements, copy sales invoices and all paid bills, in order to prepare accounts in the prescribed form, and will deal with a number of deadlines thrust upon us.

If your sales reaches £68,000 in any 12 months you must register for VAT. It may pay to use the Flat Rate Scheme, under which you charge your customers VAT as normal at 17.5%, but pay VAT to HM Revenue & Customs at a flate rate (see VAT Notice 733) calculated on the VAT inclusive amount of your sales.