Hello everyone,
I do hope it is OK to post these questions here. I appreciate that an accountant would be a much easier route, however given this is a small hobby of mine the costs would be proportionately large and I would at least to try and give this a go myself.
Situation:
I work full time for a company and I am paid via PAYE
I have setup a little eBay business selling some items I make starting 6/4/2020 and will be registering as a sole trader (by the 5th October 2021). I have tracked all expenses and income and put what I think is more than enough tax, NI, Student Loan etc aside to pay for this tax year for payment deadline (I believe that would be 31st Jan 2022), along with another 50% for payment on account.
Questions:
1) My P60 for this tax year shows a lower figure than my salary due to the high pension payments I pay. Am I correct in thinking that although I pay around 9.6% pension each month, that this is used to calculate my overall income for the purpose of tax brackets?
2) I am a B share holder in my wife's company and have used the £2000 tax free limit this tax year. Is this also considered towards my income, despite being tax free?
3) So is my understanding correct for the following general scenario:
PAYE - £45,000
Dividend - £2,000
Income of £47,000
Sole Trader profit - £8,000
I will pay upper tax threshold on £5,000 of sole trader profit (££2,556.10), along with Class 2 (£158) and student loan (£720)?
I have used this website as a rough guide: https://www.employedandselfemployed.co.uk/tax-calculator
I guess HMRC will calculate what I owe when I submit my self assessment but just looking for a ball park figure.
Thanks for any pointers
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