Taxing Question for part time sales job

beastman

Another poser I need solving please - probably an easy one.

I am currently working in a normal PAYE job - what I need to know is if I earn say £3000 in a part-time self employed job and the costs involved in the form of tax deductable expenses (such as petrol) to earn that money cost me about £2500 does that mean I should only be taxed on £500 for that part time job ?
My normal job uses up my yearly tax allowance so I assume this doesnt make all my above earnings 100% taxable - surely the tax deductable expenses are still taken into acount as normal?

thanks

mtfree

its hard to think what allowable deductions you can have for a part time job that would total £2500 but in essence your right the amount that is taxable is the total income less ALLOWABLE deductions which in the example above is £500. As your otherjob uses your personal allowance tax is payable on the full £500. Good luck getting such high deductions. By the time you pay the income tax your £3000 has only earned you around £400 in hand.

beastman

mtfree wrote: »

its hard to think what allowable deductions you can have for a part time job that would total £2500 but in essence your right the amount that is taxable is the total income less ALLOWABLE deductions which in the example above is £500. As your otherjob uses your personal allowance tax is payable on the full £500. Good luck getting such high deductions. By the time you pay the income tax your £3000 has only earned you around £400 in hand.

Yeah the job I am doing pays a small commission - so small its not really worth it and the petrol costs are high - I reckon I'd be doing nearly 7000 to earn that £3000 and at 40p claimable per mile I make that about £2700. I hope I've got these figures right mind! Apart from the lousy money I'm earning does this sound right?

mtfree

As long as the miles are allowable business miles then 7000 miles at 40p per mile is £2800. This is set against your income (along with any other allowable expenses) as you state go give your taxable income. You will need to inform HMRC who will issue you a tax return where you can declare this income.

CLAPTON

now 7000 miles at say 30mph is about 233 hours of driving

and at £6 per hour, you could earn 6 x 233 = £1,400 at tesco without driving 7000 miles

chriiiiiiiis

Remember you don't actually get 40 pence for every mile you drive.

You get tax relief on the 40 pence - which is 20% in your case.

jimmo

Really good point from Clapton. My guess is that you are contemplating doing home deliveries for a take-away.
If so the journeys between your home and the take-away are normal commuting journeys and not allowable.
You will have to insure your car for business use.
You will probably have a lot of dead time, sitting in your car or the take-away doing nothing.
In next to no time your car will be knackered from the constant short journeys and your mpg will be absolutely shot for the same reason.
Shelf stacking in Tescos can be pretty hard work but if you are strapped for cash it will be so much better for your pocket.
Sorry if I’m wrong.

beastman

thanks for your input guys its really appreciated.The job is a sales job but it pays rubbish commission and this is why I am working out how I can prove this to the company and get my commision significantly increased to make it worthwhile. The tax side of it is confusing though. Are these figures about right?

Profit after expenses

5482.50 Commision Received
- 1732.50 mileage costs (6930 miles @ 25p per mile)
- 350.00 mobile phone and landline
- 300.00 accountancy fees

---

3000.00 profit before tax

I think I can claim about £3500 as tax deductable expenses most of which is mileage (can claim 40p per mile - 6930 miles = £2772) but also the accountants fees and maybe some work clothes and a small element of my phone and broadband costs - I have factored in £728 which might be optimistic.

Therefore I would pay no tax at all on the above figures as I it would cost me more in tax deductable expenses than I actually made?

thanks alot

CLAPTON

can't make any sense of what you are saying here

you deduct 1732.50 (6930 at 25p) for mileage then later talk about 40p per mile claim too... what do you mean
the HMRC will allow you to claim against tax the difference between 40p and whatever the company pays you for the first 10,000 miles... do they pay you a mileage allowance and if so what is it.?


again you take off 300 accountance fees and then later say you have other tax deductable expense ... accountancy fees

again you deduct 350 for mobile and phone and then say you have factored in 728 etc.


you can only claim once for each item

beastman

CLAPTON wrote: »

can't make any sense of what you are saying here

you deduct 1732.50 (6930 at 25p) for mileage then later talk about 40p per mile claim too... what do you mean
the HMRC will allow you to claim against tax the difference between 40p and whatever the company pays you for the first 10,000 miles... do they pay you a mileage allowance and if so what is it.?


again you take off 300 accountance fees and then later say you have other tax deductable expense ... accountancy fees

again you deduct 350 for mobile and phone and then say you have factored in 728 etc.


you can only claim once for each item

As you can see have little idea how to work out what tax I would be paying and what I can legitimately claim for. The figures quoted were based on what I earn after expenses but before being taxed and the petrol element is based on what I assume it would cost me to run the car. Based on the figures I have quoted could you please alter them to how it should work in the real world?

thanks

CLAPTON

something like this

income
5482

tax deductable expenses

mileage 40p per mile i.e. 40x 6930 = 2772... this assumes that this is all business mileage and does NOT include home to office mileage and it assumes the company does NOT pay any petrol / mileage expenses to you.

-mobile and landline cost 350
-accountants 300 (seems huge in relation to income)

so total costs are 3442


so taxable pay is 6930-3442 = 3508

so tax is 20% of 3508 = 702

plus some NI depending how the income is distrubuted over the year.

You say maybe you can claim clothes... why is this ; what sort of job is it?