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Ad hoc research/consulting income
muhandis
Posts: 994 Forumite
Hi,
I'm a higher rate PAYE taxpayer and outside my main employment I frequently participate in industry research (essentially a call with a consulting company lasting 30-90 minutes) for which they pay me a per hour fixed fee.
Last year I declared this as misc income on my self assessment return thus being taxed on it at 45%. However, this has been getting more frequent and it looks like I might start earning a decent amount of money through this route over the next year or two.
I know I can't get any formal advice on here but I was wondering if anyone could suggest how I might avoid paying 45% tax on this additional income. The consultant who gets me these jobs says that most of the fee payments they make are to ltd cos and only rarely to individuals. What would be the advantages of starting a ltd co just for the additional income?
Thanks in advance!
Edit: 40 not 45%!
I'm a higher rate PAYE taxpayer and outside my main employment I frequently participate in industry research (essentially a call with a consulting company lasting 30-90 minutes) for which they pay me a per hour fixed fee.
Last year I declared this as misc income on my self assessment return thus being taxed on it at 45%. However, this has been getting more frequent and it looks like I might start earning a decent amount of money through this route over the next year or two.
I know I can't get any formal advice on here but I was wondering if anyone could suggest how I might avoid paying 45% tax on this additional income. The consultant who gets me these jobs says that most of the fee payments they make are to ltd cos and only rarely to individuals. What would be the advantages of starting a ltd co just for the additional income?
Thanks in advance!
Edit: 40 not 45%!
0
Comments
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if you want to take the money and spend it then you would pay marginally less tax by dealing via your own company
if you don't need to spend the money then leave it in a company until such time as you do need it eg when you are no longer an additional rate taxpayer.
since you are already at additional rate anyway it sounds like you need to see an accountant to have a complete check up done of your personal finances and tax efficiency anyway0 -
Thank you. Ugh, sorry I mistyped, I meant 40 not 45%. I don’t need to spend it now and do expect to go back on 20% when I take maternity leave sometime in the next couple of years so what you said could apply. Cheers.if you want to take the money and spend it then you would pay marginally less tax by dealing via your own company
if you don't need to spend the money then leave it in a company until such time as you do need it eg when you are no longer an additional rate taxpayer.
since you are already at additional rate anyway it sounds like you need to see an accountant to have a complete check up done of your personal finances and tax efficiency anyway0
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