Tax for Self-Employed?

[byronkincaid]

Made up figures, say for example that if you earn £50K working for a company and you are on PAYE that you pay 20K a year tax.

If you are self-employed and earn 50K and have 20K allowable expenses you pay no tax? If this is right is it also right that if you have 19K expenses you pay 1K tax?

I know I should google just wondering if I'm roughly right?

[sovietsong]

you would just pay tax on £30k if you wrote of £20k as expenses.

[AceofWands]

It doesn't really sound right to me.  Surely the 20k expenses are just deducted from the total and you are then liable to pay tax on the remaining 30k.  Why have you got an appointment with HMRC or something LOL?

[EvilPie]

Very much what these 2 have said.

Still pay tax on 30k.

[vegaslover]

minus your tax allowance of course

[byronkincaid]

so when i'm down the pub with a bunch of builders who reckon they're on a grand a week and only pay £800 a year tax they are pulling my leg?

[EvilPie]

so when i'm down the pub with a bunch of builders who reckon they're on a grand a week and only pay £800 a year tax they are pulling my leg?

Lol. I love people like this.

Have they got a clapped out ford sierra out in the car park by any chance?

[byronkincaid]

so when i'm down the pub with a bunch of builders who reckon they're on a grand a week and only pay £800 a year tax they are pulling my leg?

Lol. I love people like this.

Have they got a clapped out ford sierra out in the car park by any chance?

no they all drive vans, a plumber, an electrician and a guy who owns a building company. known them all for years could be a windup tho

[Claw75]

so when i'm down the pub with a bunch of builders who reckon they're on a grand a week and only pay £800 a year tax they are pulling my leg?

Lol. I love people like this.

Have they got a clapped out ford sierra out in the car park by any chance?

no they all drive vans, a plumber, an electrician and a guy who owns a building company. known them all for years could be a windup tho

either that or they're all doing a lot of cash-in-hand work

[sovietsong]

so when i'm down the pub with a bunch of builders who reckon they're on a grand a week and only pay £800 a year tax they are pulling my leg?

so many self employed people have 3 sets of books.  one for them, one for the bank and one for the tax man!

[EvilPie]

so when i'm down the pub with a bunch of builders who reckon they're on a grand a week and only pay £800 a year tax they are pulling my leg?

so many self employed people have 3 sets of books.  one for them, one for the bank and one for the tax man!

It's not like the old days though. If someone does anything as a sub contractor for a firm they get taxed on their invoice instead of paying it themself after.

If anyone works for us as a new sub contractor we have to check with the tax people whether to pay them in full or stop 25% of their labour charge.

The tax people get us to collect on their behalf. Nice plan.

[lazaroonie]

Very much what these 2 have said.

Still pay tax on 30k.

that is of course providing the tax man accepts that your 20k expenses have been incurred 'wholly, exclusively, and necessarily' in the operation of your 'business'.

[EvilPie]

Very much what these 2 have said.

Still pay tax on 30k.

that is of course providing the tax man accepts that your 20k expenses have been incurred 'wholly, exclusively, and necessarily' in the operation of your 'business'.

Which if it's 20k out of 50k total they probably won't.

[pokerfan]

Sub contractors have 20% removed at source. In theory your still liable for the extra 10% ish but with expenses etc its not unusual to get a refund on what you have already paid.