Setting up a new small business

mrsgally

Hi,

I have been told that I am going to be made redundant within the next 12 months or so. I want to take the opportunity to set up my own business as a dog trainer. (I am already a trainer and studying behaviour, not just someone out to make a buck from niaive owners.)

What I am unsure of is how I will be taxed. I will need to build my client base whilst I am still working full time so that I have some work when I leave my current job. But how will I be taxed on this? Am I taxed at a higher rate than currently as it is a second job, is it taxed at the same as my current PAYE job or will I be taxed as a self employed worker as I believe self employed people pay less tax?

I will be making very little money from this in the first instance whilst i build up my client base as I will have venue costs, advertising and insurance etc to pay so there will be minimal profit. Is there any amount I am allowed to earn in the initial stages of setting up my business without being taxed on it?

Many Thanks
Mrs G

Mistral001

There is no separate tax rate for self-employed people. You will be paying personal income tax at exactly the same rate as you are paying now. If you start to make a profit trading as a dog trainer you have to declare that as it is income. It will then be taxed at the same rate as your present PAYE.

You also have to pay National Insurance.

steve1980

Mistral001 wrote: »

There is no separate tax rate for self-employed people. You will be paying personal income tax at exactly the same rate as you are paying now. If you start to make a profit trading as a dog trainer you have to declare that as it is income. It will then be taxed at the same rate as your present PAYE.

You also have to pay National Insurance.

Each year you will receive a self assessment tax form which you can do online.

WHATEVER you make or lose from the self employed business you will need to put on the form.

Unless you make over £5XXX each year you will NOT have to pay National Insurance. You can apply for a waiver from HMRC.