Help with website buisness

indierocker85

Hi Guys

I have a site being made, I won't go into too much detail but basically, it is projected to make a large chunk of money per month via affiliates.

I plan to register as self employed and for tax and NI. However I am keeping my part time day job.

The only expense the site will have is a £15 per month hosting charge.

I have a few questions really

1) If the site doesn't make money in one month, can I offset the £15 expense that month against my tax paid on my day job?
2) When are Tax and NI paid? And where can I read up on this a bit more? (I am aware of what is payable, but not when)

Also, how do I keep records for a business of this kind?

And are there any softwares available for helping work out your tax and NI etc?

Savvy_Sue

Get in touch with HMRC: you won't be paying any tax on your self employed income on a monthly basis, you complete a self-assessment form at the end of the tax year and it's then due in (I think) 2 instalments.

However NI is payable monthly, unless your s/e income is likely be below c. £6000, in which case you can ask for an exemption certificate. Again, ask HMRC because you can't claim NI back if your income fluctuates or if you've paid it when you didn't need to (AFAIK).

You could do with looking at the Businesslink and HMRC sites - the latter has pages devoted to self-employment and they are usually quite friendly on the phone!

As for records - what do you need? An Excel spreadsheet with cash in and out? I've analysed expenditure using one of them, not quite double entry bookkeeping but with checks that everything is allocated to a particular 'teapot'.

And if you complete your self assessment form online, the software does work out what you're due to pay, I believe.

paulwf

Call Business Link and go on their free startup courses (if the government hasn't cut them yet).

debbie42

As for (1), to my knowledge, you can't offset expenses/losses from self employed business against a PAYE job.

indierocker85

Savvy_Sue wrote: »

Get in touch with HMRC: you won't be paying any tax on your self employed income on a monthly basis, you complete a self-assessment form at the end of the tax year and it's then due in (I think) 2 instalments.

However NI is payable monthly, unless your s/e income is likely be below c. £6000, in which case you can ask for an exemption certificate. Again, ask HMRC because you can't claim NI back if your income fluctuates or if you've paid it when you didn't need to (AFAIK).

You could do with looking at the Businesslink and HMRC sites - the latter has pages devoted to self-employment and they are usually quite friendly on the phone!

As for records - what do you need? An Excel spreadsheet with cash in and out? I've analysed expenditure using one of them, not quite double entry bookkeeping but with checks that everything is allocated to a particular 'teapot'.

And if you complete your self assessment form online, the software does work out what you're due to pay, I believe.

You say about the tax being due in 2 installments, how does this work? Do they give you a final figure for the year, and let you pay it in two installments to make it easier? Or is it for necessity for some reason?

As for the national insurance, how does this work? Especially since I am not telling them what I have earned until my end of year tax return

indierocker85

What is an "Exemtion certificate" exempting me from paying annually? Or from paying altogether?

martindow

indierocker85 wrote: »

You say about the tax being due in 2 installments, how does this work? Do they give you a final figure for the year, and let you pay it in two installments to make it easier? Or is it for necessity for some reason?

Being self employed you do not know what your income is until the end of the year. The IR get you to pay half of your next year's tax bill in July estimated from your previous year's income. When your tax return is done payments are made in January to correct as necessary and this determines the following year's payment.

martindow

indierocker85 wrote: »

What is an "Exemtion certificate" exempting me from paying annually? Or from paying altogether?

If you anticipate that your income is likely to be low you can apply to be exempted from paying class 4 (self employed) NI.

indierocker85

You get exemptions for Class 2 + Class 4? If I am startup how do they estimate what it may be?

Savvy_Sue

indierocker, have you looked at any of the pages about self employment on the HMRC website yet? They explain how the system works.

debbie42 wrote: »

As for (1), to my knowledge, you can't offset expenses/losses from self employed business against a PAYE job.

Not directly, but I believe that it's your TOTAL income that's taken into account on the self-assessment form. Therefore if you're showing a loss on your self-employed income, your TOTAL income is reduced, so you MAY have paid too much tax overall.

This probably isn't relevant to the OP however, who doesn't sound as if he will have many startup costs and is confident he'll be showing a profit from the start.

indierocker85 wrote: »

As for the national insurance, how does this work? Especially since I am not telling them what I have earned until my end of year tax return

indierocker85 wrote: »

What is an "Exemtion certificate" exempting me from paying annually? Or from paying altogether?

You have to predict your income. If it's low enough, you can ask to be exempted from paying altogether. BUT as soon as you realise you're going to be due to pay, you need to be in touch to start paying: don't wait until the end of the year.

indierocker, have you looked at any of the pages about self employment on the HMRC website yet? They explain how the system works more authoritatively than any of us can.

indierocker85

Right, thanks for all your help guys

Just so I know I'm working this out correctly any net profit between 5175 and 43875 is payable as 8% fopr class 4 NI.

So if I earn £5200 net profit in self employment, then the £25 over the threshold 8% of it is payable as NI?

Just I am trying to knock a spreadsheet together to try and estimate what tax may be due etc