issues with declaring second income

clouds123

cotswoldaccountant wrote: »

If you do exceed the higher rate tax threshold, you would only have to pay 40% tax on the amount which exceeds the threshold - not the whole of your income. So if it's £80 over, you would pay 40% tax on that £80 only (£32) and 20% tax on the rest of your taxable income.

However, if you are self employed, you can deduct expenses you have incurred from your turnover to reduce your taxable profit. You are taxed on your profit rather than the value of the bills you raised.

Just as an example, if you work from home for the Swiss company, you can claim £4 per week as an allowable expense.

Oh really? That's great news! Such a relief!

I thought I would have to pay 40% on my total income...which would make me a lot poorer than earning less... Thank you so much!

Would you recommend setting up my own limited company or registered as a sole trader? Some friends who work as contractors suggested me to do so, saying that I could pay less tax. Would this be possible for my case? If so, how could I go about this and what would be the most cost-efficient way?

Thank you very much!

xylophone

Why not take professional advice?
http://www.unbiased.co.uk/business

jennifernil

Sole trader is simpler.

http://www.churchill-knight.co.uk/?gclid=COmQn9qewrMCFSbMtAoduzEAHQ

you can compare here.

ceeforcat

Have to echo the advice of xylophone - the op really needs professional advice and, unfortuately, the questions posed reveal the scant knowledge that she possesses. Horses for courses and all that!!!

I am also not sure about signing one's posts with what is presumably her real name, and an uncommon one at that.