New to Self Employment

_Dolly_Rocker_

Hey all, 

So I am new to this self employed thing and I have some questions that I know some on here will be able to help me out with!

Question 1 - Tax
I do work full time with an income of around £22k per year and I have started my own dog walking business to work around this job. 

I've got a spreadsheet and I am going to keep aside 25% of my earnings for tax, I think I do only need to pay 20% but want to keep a bit extra as a buffer. Don't want to get a tax bill at the end of the year that I can't afford. Is this a sensible way to do it or should I keep some more aside? 

Question 2 - NIC
If my profits are at least £6,515 I need to pay £163.80 for the 2022/23 tax year. I don't see me earning this much but I'll keep that amount aside anyway just incase. 

Question 3 - Expenses
So I will have some expenses, insurances etc. Do I pay these out of the total amount I make or do I deduct this amount from the tax I pay each year? Very confused about this one? 

Also I do some admin from home, can I claim for gas, electricity, internet, mobile? I use the car, how much of my car insurance can I write off as an expense? 

Think that's it for now!

Thank you!!!

Dazed_and_C0nfused

1.  Depending on the amounts involved you could have payments on account to make once you file your first return so maybe putting away 30% would be a more prudent approach.

2.  You can have Class 4 NI to pay as well but the threshold is even higher for Class 4 so unlikely to be relevant but something to bear in mind if your profit increases.

3.  They are deducted from your turnover to leave a profit amount that will form part of your tax calculation.  You do not deduct them from the Self Assessment liability.  It might be worth you reading through the self employment pages (and notes) of the Self Assessment return.

https://www.gov.uk/government/publications/self-assessment-self-employment-short-sa103s

One of the most important things to remember is that your Self Assessment return is for you to declare all your taxable income, not just the self employment.