Small business

stroppyjock

Good morning.

Can I please ask the forum some questions?

I currently run a small business taking people on birdwatching and wildlife tours. I have been doing this free of charge to see if there was a market and I am happy to report there is and want to start charging a fee.

Now this is a second job, my main employment is full time in the transport industry. My questions are:

1. Do I have to register the business with HMRC for tax purposes?
2. Do I pay tax at 20% and NI contribution at 12% on these earnings also?
3. I use my own vehicle (business insurance paid) and according to HMRC wesite I can claim back 40 pence a mile. Is that taken off my earnings prior to working out the tax?

Any info would be gratefully recieved.

Thanks in advance

Stroppyjock

Elaine_Wilson

1. Yes, you should register as self employed as soon as you start doing this with a view to earning profits.

2. Tax would be at 20% providing the additional income does not put you into the 40% band. National insurance is very different. The self employed pay two lots of NI. Class 2 is a weekly flat rate. If your anticipated profit is below a certain limit (currently £5,315 a year) you can apply for exception and should do this when you register. The other payment, Class 4, is related to your income but only the self employed bit. You pay 9% of the excess over £7,225. These limits will change on 6th April.

3. Yes, and the rate for the first 10,000 miles is now 45p.

stroppyjock

Great information, thanks Elaine.