Second income, pay less tax?

freedan

I work in IT and have been offered the opportunity to earn a second income working alongside my full time job.

The extra income will all be taxed at the 40% rate, and I assume I would have to pay student loan and NI contributions as well, so i'm looking (according to the calculator) to only see about 50% of it at the end.

I have the option to set up a ltd company and was wondering if it would be better for me to do this and pay myself in dividends, or if there are any other options.

I am quite happy to pay whatever tax I need to, but I would prefer to keep as much of it as I can as I am only doing it to try and recover some debt!

Any advice would be great. Thanks!

xylophone

http://www.studentloanrepayment.co.uk/pls/portal/docs/PAGE/RPIPG001/RPIPS001/RPIPS006/REPAYMENT%20BOOK%20A5_V3.2_WEB.PDF
page 14 might be relevant.
http://www.contractorcalculator.co.uk/Limited_Companies.aspx
https://www.gov.uk/browse/business/limited-company

freedan

Thanks for this, I will have a look at the information and see if I can work out the best solution for me.

nd85_2

A partnership might be easier administratively.

forums.moneysavingexpert.com/showthread.php?t=4422081