Income Tax Vat

AndyWII

If your business has a turn over 70k
Running Cost 15k
Could you take all the 55k and just pay income tax on it? or will it be subject to VAT aswell?

nrsql

You don't have an accountant.
Not VAT - you can't charge your business VAT unless you are VAT registered.
It depends how you take out the money but I would guess income tax and possibly NI.

Note that the business will have to pay VAT on all VATable income (which it should have charged so no loss). I assume your 70K is after that has been paid.

Debt_Free_Chick

AndyWII wrote:

If your business has a turn over 70k
Running Cost 15k
Could you take all the 55k and just pay income tax on it? or will it be subject to VAT aswell?

You must be registered for VAT if your turnover is £70k. This means that you charge VAT on everything you sell (or all the work you do) and you offset against that the VAT that you pay on goods and services supplied to the business.

If your turnover is £70k and then you charge VAT, then £70k is retained in the business. You then have £55k profit which you can draw out. If you are a sole trader, then you will pay income tax & NI on all your profit, whether you draw it out or not.

If you are a limited company, you only pay income tax & NI on the salary you draw.

pchelpman

Agreed both the above.

Andy - do yourself a favour. Get (and pay for) some advice from a properly qualified advisor. Don't try to figure all this out yourself. It's just too dangerous.