Employed and Self-employed tax question

[Bacharach1974]

Hello all

I'm in full time employment but also work occasionally as a self-employed singer. I want to complete my Self Assessment form for the singing work I've done for the 2010/2011 tax year.

My question is, approximately, how much tax should I expect to pay on my singing earnings of £4500?

Any advice would be really appreciated.

Thanks
Andrew

[section 44]

1. What is your total taxable income ignoring the singing earnings (i.e. earned income, bank interest, dividends etc)?

2. What expenses have you incurred wholly and exclusively for the purposes of your singing business (i.e. what is the taxable profit of your singing business)?

[Bacharach1974]

Thanks for the quick response.

I earn £25k from my full time employment and have no dividends etc. My expenses from the singing work are in the region of £900 - that is what I've spent on equipment, travel etc.

[Incredulum]

Income tax:

Profits: £4,500-£900 = £3,600

Taxed at 20%, tax = £720.

What have you done about NI?

[Bacharach1974]

Income tax:

Profits: £4,500-£900 = £3,600

Taxed at 20%, tax = £720.

What have you done about NI?

Thanks - I have been granted exemption as I'm already paying NI via my full time employment - the adviser I spoke to when I regestered stated that as my self employed earnings were likely to be under 5k that NI exemption would be granted on these earnings. I then received an exemption certificate.

One last question - I bought my PA equipment from a friend, would a dated hand written receipt from him be acceptable proof of purchase for expenses?

[mullet]

One last question - I bought my PA equipment from a friend, would a dated hand written receipt from him be acceptable proof of purchase for expenses?

If that is the receipt that is offered, then that is your proof of purchase. Paying by cheque rather than cash provides further evidence to substantiate the acquisition, as would taking a couple of pictures of the equipment. That's going overboard though ... the paper receipt should suffice.

[section 44]

that is what I've spent on equipment

This sounds like it may be capital and not deductible in calculating the profits of your singing business.

[Incredulum]

As presumably it's under 25k, the AIA would cover it.

[Bacharach1974]

As presumably it's under 25k, the AIA would cover it.

Thanks again Incredulum - what does AIA stand for/ mean?

[Incredulum]

Annual Investment Allowance - whereby the first 25k (possibly more depending on the year in question) of capital investment may be claimed as a tax deduction in the year.