self employment.

Mum2Boys_2

hi all im hoping someone could advise me.
My partner is going to go self employed as a parcel delivery driver in a few weeks and I have offered to do his invoices and accounts to save quite a bit of money. ive done this before and am good with maths so feel quite capable, there is just one thing I would like some advice on.
the tax and what I am to deduct before he pays any, for example:
in a week he will invoice the company for around:
£1000
his van is
£200 per week
his fuel is
£100 per week
and then other expenses say stationary etc
£50
so his costs are £350 per week, so do I then take the 20% from the remaining £650? also does he still get the tax free allowance of £10600?
I would appreciate any help!
thank you.

Darksparkle

When you say you are going to deduct the tax, what do you mean? Are you going to put that money away somewhere?

You'd need to keep an eye on figures to see if he is 20% or 40% taxpayer.

For this year would also need to factor in what has already been earned.

Without knowing his full circumstances it's hard to comment on personal allowance. Assuming he has no other taxable income, depending on age etc, he should have a personal allowance of £10,600.

https://www.gov.uk/income-tax-rates/current-rates-and-allowances

You also need to factor in NIC and any student loan deductions if applicable.

https://www.gov.uk/self-employed-national-insurance-rates

https://www.gov.uk/repaying-your-student-loan/what-you-pay

Are those expenses definitely correct? £10,400 per year for a van? Plus another £100 per week for fuel? Fuel would seem okay for deliveries but van cost seems high.

£50 per week just for stationery?

Mum2Boys_2

Thank you for your reply, the £200 per week for the van is correct as it includes all his insurances which are high due to this being his first year he would have started. The fuel will be £100 or more and the stationary price was just an example for my question. does the 40% apply to earning over £50000?
I was planning to deduct the 20% every week and not worry about the allowance as we decided it would be better to have more rather then less and anything left over is a bonus. There are no student loans, and I didn't actually even think about NIC so thank you for bringing this to my attention.

Darksparkle

Mum2Boys wrote: »

Thank you for your reply, the £200 per week for the van is correct as it includes all his insurances which are high due to this being his first year he would have started. The fuel will be £100 or more and the stationary price was just an example for my question. does the 40% apply to earning over £50000?
I was planning to deduct the 20% every week and not worry about the allowance as we decided it would be better to have more rather then less and anything left over is a bonus. There are no student loans, and I didn't actually even think about NIC so thank you for bringing this to my attention.

40% starts at £42,385 (it's in the link posted about tax rates and personal allowance).

ThemeOne

If you haven't done so already I would look through the HMRC website relating to self-employment:
https://www.gov.uk/topic/business-tax/self-employed

bugslet

Darksparkle wrote: »

https://www.gov.uk/self-employed-national-insurance-rates

https://www.gov.uk/repaying-your-student-loan/what-you-pay

Are those expenses definitely correct? £10,400 per year for a van? Plus another £100 per week for fuel? Fuel would seem okay for deliveries but van cost seems high.
?

£100.00 seems a bit light to me for fuel, though I suppose it depends exactly on how tight his area is.

Does the £200.00 include breakdown and repairs + replacement if the van is off the road, in which case as a deal goes it seems OK to me.

Mum2Boys_2

Yes, it covers everything with regards to the van.

Serendipitious

Allowable expenses can be found here:

https://www.gov.uk/expenses-if-youre-self-employed/overview

prosaver

isnt the target you have to deliver 100 parcels a day.
cant you get your own van ..it all sound a bit Dodgey to me...not being funny

specialboy

I've seen parcel delivery jobs for around .45p per parcel so he's going to have to work his socks off, can't see it working tbh but good luck to him.