self employed and national insurance?

quintwins

i'm about to register as self employed as i'm starting to sell on ebay and want to keep it all above board, however i won't make no where near the £5300 this year it says you should earn before you pay national insurance, however as my kids are young i get my national insurance paid for me, if i register as self emplyed will i still get it paid? if not i'd like to pay the £2.50 a week now even if i don't need to.

also stupid question (this is a really blonde question you have been warned) the amount of tax paid is based on money i take from the business, and won't include any money i put back into buying stock? my plan is to just let it tick over building up more stock, even if i didn't do that i'd still struggle to get £5300 profit, also am i allowed to take money i put in for stock to start with back out without it being taxable?


thank you in advance for any help.

Notmyrealname

No you won't get it paid. Unless you complete a small earnings exemption form because you expect to earn below the threshold you will pay Class 2 NIC at £2.50 a week billed every 6 months. However if you fill in the form and don't pay Class 2 NIC you will not be eligible for contributions based sickness benefits such as Cont ESA.

You pay tax on the profit which is income less deductible expenses.

chalkie99

Money you put in to get yourself going can be taken out again - that is "capital introduced" or a loan by any other name.

Tax is paid on profits, not on what you decide to draw out and, although you can deduct business related expenses, re-investing the takings in extra stock doesn't count unfortunately.

So, effectively, you put £100 of your savings into initial stock, make £50 profit on sales and you owe tax on the £50 profit, whether you decide to buy new stock or blow the lot on the high life! At any time you can put the initial £100 back into your savings with no effect on your profits or tax bill.

Having said all that - is this your only employment?

If so, your estimated level of profit will not exceed your personal tax allowance anyway.

McKneff

To be honest, I think you need to do a bit more research about self employment and its implications.

With all due respect you sound as if you dont have a clue.

Ask the HMRC for a self employment pack

quintwins

Notmyrealname wrote: »

No you won't get it paid. Unless you complete a small earnings exemption form because you expect to earn below the threshold you will pay Class 2 NIC at £2.50 a week billed every 6 months. However if you fill in the form and don't pay Class 2 NIC you will not be eligible for contributions based sickness benefits such as Cont ESA.

You pay tax on the profit which is income less deductible expenses.

ok thank you i was just wondering as i'm a sahm at the moment, i have been look on hmrc and i do belive we will be well under the threshold, in which case will i still get my national insurance paid for me? i'd rather pay it now than assume it's paid and it to come back and bite me later.

chalkie99 wrote: »

Money you put in to get yourself going can be taken out again - that is "capital introduced" or a loan by any other name.

Tax is paid on profits, not on what you decide to draw out and, although you can deduct business related expenses, re-investing the takings in extra stock doesn't count unfortunately.

So, effectively, you put £100 of your savings into initial stock, make £50 profit on sales and you owe tax on the £50 profit, whether you decide to buy new stock or blow the lot on the high life! At any time you can put the initial £100 back into your savings with no effect on your profits or tax bill.

Having said all that - is this your only employment?

If so, your estimated level of profit will not exceed your personal tax allowance anyway.

yes this is my only income, at the moment i look after our young children, i don't think we will reach the tax threshhold this year or even next.

McKneff wrote: »

To be honest, I think you need to do a bit more research about self employment and its implications.

With all due respect you sound as if you dont have a clue.

Ask the HMRC for a self employment pack

thank you we all have to start somewhere and if you don't ask no-one will walk up and tell you, i have been reading up on the hmrc site, i'll phone up and ask for a pack tomorrow, does it have anymore info that the website?

McKneff

It wasnt a critisism, sorry if it came over that way, and i really wish you good luck in your business.
The more research you do the better and easier it will be for you.

Its nice to see someone doing something positive and not be moaning and groaning as to whether they can maximise their benefits or get more and more money from the state. Good for you.

Hope things go well for you.

quintwins

McKneff wrote: »

It wasnt a critisism, sorry if it came over that way, and i really wish you good luck in your business.
The more research you do the better and easier it will be for you.

Its nice to see someone doing something positive and not be moaning and groaning as to whether they can maximise their benefits or get more and more money from the state. Good for you.

Hope things go well for you.

i didn't take it as critisism, i just meant thats we all have to start somewhere and build on that knoledge, i appreiciate all help and feedback.