Freelancing + Tax in the UK

[JSPearson]

Hello,

I'm going to start taking on freelance web development work this year, as the first step towards one day working for myself.

However I have no idea about what tax I will have to pay or how to pay it.

I will be doing this as a second job, and maintain my full time employment.

Can any one offer me any advice on where to start looking in to this subject?

Regards

James

[andrewm]

Ok for your new venture you will not need to register for VAT unless you turn over £60k a year (limit used to be £56k but i believe it just went up)

You need to inform HMRC (new name for Inland Revenue) that you are self employed in a part time job as you will need to, i believe, pay NIC for your second job. You have 3 months from start of trading to inform HMRC or face a £100 fine.

If your income is then below the £4400 bracket from new company, I believe you can register (i think not 100%) for Class 2 Exemption which means you dont pay NIC as your wages from company are below £4400.

Unsure as i only have done my businesses as full time not part time in addition to full time.

When you come to pay company tax bill remember anything you use towards setting up business can help reduce tax bill. E.g. We bought 20 £250 radios, £10k of Computing Power and alot of uniforms etc. We can claim 25% of the value off our tax bill. Then 25% the next off the remainder amount (i.e. not down to 50% but 25% of remaining 75%!) etc until value is £0.

Hope it helps!