Tax in the UK

[Robocop]

I have recently had to become VAT registered about 5 months ago so im fresh on this

The VAT man offers an option of paying 10 to 12% VAT instead on 17.5%. The way it works is you charge 17.5% but pay 10 to 12% to the VAT man on the condition you do not claim any tax back from the VAT man.

This can work well for you if the amount of VAT you can claim back is very small.

[Resonate]

Originally Posted by Robocop

The VAT man offers an option of paying 10 to 12% VAT instead on 17.5%. The way it works is you charge 17.5% but pay 10 to 12% to the VAT man on the condition you do not claim any tax back from the VAT man.

This can work well for you if the amount of VAT you can claim back is very small.

Excellent thanks for that info Robocop very helpful

[bochgoch]

Originally Posted by vicdigi

You shouldn't be paying 40% tax if you take money as dividends

I pay 40% tax on my earnings outside of the internet so can't avoid it.

[mikeinlincs]

Originally Posted by rhyswynne

Through blogging and my other online ventures, I probably earn about £1000 a year through link sales and the like. I'm unsure exactly what to do regarding it, so two questions:
a) Should I worth declaring it?
b) How does one go about making sure I pay tax on it?
Thanks

Yes contact the tax asap as failing to declare your earnings and making a Self Assessment could result in a fine of £100 + from our lovely tax office.

Your earning are classed as self-employment and you will be taxed on them plus you will have to pay NI contributions as a self employed person, even if you have a full time job and pay tax + Ni under the PAYE.

HM Revenue & Customs: Home Page tax office online has more help... but contact your local office asap to aviod the fines.

Mike

[Robocop]

I have recently had to become VAT registered about 5 months ago so im fresh on this, If your business turnover is more than the VAT threshold (£64,000 from 1 April 2007) you will normally have to register for VAT. Even if your turnover's below the threshold it might benefit your business to register voluntarily.

Just to add, if you pay VAT you can opt to pay 10% to the VAT man instead of the 17.5% collected.

The deal is you charge customers 17.5% but pay the Vat man 10% BUTyou cannot claim any VAT back from expenses, purchases etc. This can work out very well if you purchase few goods. I have been doing this for the last 3 years.

Best advise is, if your not sure speak to the VAT/Tax man they can be a great help. If you ignore them and dont pay it or speak to them about it, they will slaughter you when they catch you

Edited to add: Dam it, just realised ive repeated myself from a few posts above.

I pay 40% tax on my earnings outside of the internet so can't avoid it.

Can you take on a partner to double the tax relief ?

[finalfrontier]

dont pay income tax, its a fraud.
by definition, tax is slavery, your labour is yours to sell to whomever you choose, nothing to do with paying some criminal gang..

[arora]

Originally Posted by bochgoch

I pay 40% tax on my earnings outside of the internet so can't avoid it.

if ur a pvt ltd company - having directors split the dividend gets u into the 20% tax bracket!
eg ur partner & you are directors of a company & making say 30,000/ p.a each - instead of one person making 60,000 p.a & getting into the 40 % tax slab!

so both of you are paying 20 % tax - that's a saving of 20,000 pounds if ur earning 100,000 p.a

[OldWelshGuy]

he is already a 40% though. so any dividends he gets will attract higher rate tax.