UK Tax question

you can use your online business in your wife name or contact Accountant if you need to keep it on your name.

If you are self employed as a sole trader you would be paying class 2 and class 4 NI contributions which I doubt would show on your payroll details as your employers are concerned with class 1 NI primary contributions. That isn't professional advice though!

You are probably best giving HM Custom and Revenue a ring on 0845 915 4655

Nigel

Your current employer has no rights to that information. Why would they want it anyway? Sounds suspicious.

Anyway, the easiest way around this is to have a limited company, either in the UK or offshore.

I think you need to talk to an accountant TBH. There are ways that will hide your 'extra' income from your present employers like forming a company but this could incur a reasonable amount of costs.

Rich

wht you do is tell your employed your situation (the truth). What they need to know this for is for you to decide were you would like your allownces as you are allowed to make i think £106 per week before paying tax. If you want these on your self employment then you would pay a straight 20% on you normal wages.I suggest you take your £5000+ allowance on your wages and pay 20% on your normal internet salary however if your making over i think 40k then you will be paying 40% so make sure your employers are in the loop as you make pay the tax man short leaving you a massive bill in the next financial year.

Ha ha. Woops, I meant plc = private limited company, and not public limited company, as possibly the UK tax authorities might see it as...

I'd take 60 grand for a moat to keep out the pikeys any day

Hi there,

If most of your income is in dollars, what are the benefits to me as a non USA resident to incorporating a Delaware company? I've heard that it is a good state to do this in, but was wondering if someone can give some more information on the benefits?

Thanks in advance

Jason

Why?

Does your employment contract prevent you from doing similar, direct "competing" work outside of your employment? (they don't want you competing with them for work, getting the work and then deciding you'll go self employed and take the client book with you).

Have you opted into or out of the Working Time Directive? (another common reason a company wants to know if you're doing any personal work).

Apart from the above two reasons, I can't see that it's any of their business to know what other work you do.

You should have notified HMRC within 3 months of starting your self employment, and you can either trade as a sole trader, or set up a limited company (LTD). Depending on your self employment earnings, you'll be required to pay Class 2 NI and Class 4 NI, as well as the tax on your income.

You'll also need to keep a record of your income and expenditure, as a bare minimum - and keep aside the necessary tax / NI you'll need to pay (bear in mind that for the 2009/2010 tax year, you won't actually need to do self assement until January 2011 (at the latest). A common mistake amongst self employed individuals is that they see it as being so far away they don't keep aside the necessary funds to cover the tax / NI bill, so when the time comes they're in a bit of a mess!)

Talk to the tax office first. For me, they were suprisingly on the ball and got everything spot on, which meant I could get started as self employed with very little hassle.

Certainly an accountant can provide assistance with maximising your earnings later on e.g. claiming a moat as your expense (joking aside - there are things you can claim for) - but make sure you get an accountant who understands your business. If you're doing this on an additional basis to your employment, an accountant at this early stage may not be necessary, as the cost involved may not be economically viable (although in the future, any accountant worth their salt should justify their costs by making you some pretty big tax savings).

http://www.ukbusinessforums.com is a good place to look for advice on starting up, too.

The best way is an offshore company and bank account.

Aside from the anonymity, 0% tax helps as well

When i started my online business online my husband earned less so i put it in both names straight away so that i wasnt straight into the 40% tax and even when he left his employment his employer didnt even know he had a second job.

They cant find out by your NI only if you tell them!

Do not set up a company unless you know what you are doing!

A company represents a second tax paying individual and one more set of tax records to keep. Also, you will become an employee of the company and liable for NHI contributions as will the company on your behalf - the details could affect your tax code so it is possible that your emplyer will be aware that you have another source of income (though he does not need to know how it is earned).

The very best people to talk to about this are the local tax inspectors. They know all the tricks and you will find them extremely helpful - and free!

If you want impartial tax advice that has your interests at heart, see your accountant.

If you want to know how to pay more tax, talk to the tax office.

Don't ask a shark if it's ok to go paddling. :rolleyes:

If you register yourself as a sole trader (Schedule "D") I doubt it will change your tax code, so it's highly unlikely your employer will find out.

I've been self employed for 29 years, and had a limited company for 5 years.
My Girlfriend has is a member of Cima and has a Phd in Finance, but I still would not give advice about something like this.
As John said you must seek professional help from someone who knows the answers.
That's what I do myself - I use Tax Assist accountants.

Thanks to everyone who responded to my question - I received lots of good advice. As most people know, you don't want to mess the tax man around, even if your intentions are honorable, and even if the tax man's bosses are somewhat less than honorable.

I do need to inform my company about extra-curricular earnings - failure to do so would be in breach of contract. I am reluctant to go down the route of setting up an offshore (i.e non-tax paying) company because I still believe that tax should be paid, regardless of how our leaders decide to scam their expenses claims.

I think the best way forward for me would be to set up an innocent looking website (lets say a Harry Potter appreciation site..) with some adsense, and report it to my employer as extra income. This would flag my NI number as self employed, and I would have an explanation for my employer... I could then report my other earnings via the sole trader route, with the explanation that lots of people visited my Harry Potter site...

I only need a means to pay tax on online earnings, and this 'front' site would allow me to do so, without revealing too much to my employer...

I somehow don't think local tax inspectors are interested in tax planning, only tax enforcement.

That's just the sort of thinking that enables accountants to diary audit clerks' time at $100 an hour.

Local tax inspectors don't need to do tax planning - they know within very narrow confines the best way to avoid tax for each individual they speak to. Surprisingly enough, even tax inspectors resent paying tax and are very free with their far superior knowledge.

Also when you say "far superior knowledge", this is very often not the case, especially in a phone call situation.

I'm sorry your experience has been so much less joyful than mine and that of my clients but, just maybe the answer lies in that rather impersonal mode of contact? A disembodied voice on the telephone is hardly likely to receive the same attention as a keen 'customer' across a desk.

Tax planning is very much over-rated and applies only to a tiny portion of the community. Tax avoidance, however, is a mass market and the tax inspectors have the key.

You mention tax payers as "customers".

It's a pity the tax office don't follow the mantra "the customer is always right"