Sole trader tax on profits when not paying myself?

wharty

Just wondering if i have to pay any tax on my profits if i just keep it in the bank to use for expansion?
I dont plan on taking anything from the business in the form of wages for several years until it is big enough.
I have a fulltime job which pays enough.

PlutoinCapricorn

Are you entirely a sole trader and not a limited company?

If so, you need to pay the tax on your profits then you can do what you like with the remainder. It makes no difference to HMRC what you plan to do or have done with with your profits.

jamespir

you dont have to pay tax if your profits are lss than 15 grand

Rolo_Tomasi

jamespir wrote: »

you dont have to pay tax if your profits are lss than 15 grand

I'd like to know where the legislation is for this!!

Just to confirm that as a sole trader you are taxed on the profit of your business at your marginal rate (either 20% or 40%) plus you may have national insurance to pay at 8% as well (depends on the amount of your other income and profit from the business). It does not matter if you pay the money to yourself or leave it in the business bank account.

alfiesmum

jamespir wrote: »

you dont have to pay tax if your profits are lss than 15 grand

Looks like I'm due a beltin!! tax refund any time soon then! Seriously though, that isn't correct. Any money you earn, employed or self employed, is taxable.

Were you perhaps thinking of filling in a long or short tax form maybe? The limit on that used to be £15,000 before you go to a longer form I think?

PlutoinCapricorn

Jamespir, as others have said I think that you have confused the £15,000 with something else.

You do not need to list indivdual invoices and receipts if your turnover was under this amount, just put total income and total expenses.

Ste_C

wharty wrote: »

Just wondering if i have to pay any tax on my profits if i just keep it in the bank to use for expansion?
I dont plan on taking anything from the business in the form of wages for several years until it is big enough.
I have a fulltime job which pays enough.

Because it's still your money.

Whether it's sat in a personal bank account, under your bed, or in a business account it's still your money which you have earned which you can access and spend whenever you want.

There is no difference in whether you withdraw it from the business or not, it's still money you have earned.