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Don't forget, its not the earnings you pay tax on, but the profit.
Just as much as if you were working for some one. The difference is you will also have to pay both halves of social security tax. When you work for someone you pay half and your employer pays the other half.
it is the profit you pay tax on so you need to retain all your receipts relating to your work. then at end of year when doing your books take the outgoings from your turnovr and that leaves the profit -you are then taxed same as employed person. Look on Inland revenue site for current tax levels. Remember to pay your NI monthly for self employed it is only £10.50 approx and then you pay further NI dependent on your tax returns. Suggest you put 20% away of what you earn in different account so you are not left with hugh bill to pay.
If you're in the UK, look at your tax code - mine is about 5000L which means I can earn below 5000 and not pay tax. If you're single, it will be about 4745L or something. (mine is 5*** - I don't know the exact amount.)
Take notice of fengirl2 she is giving you a BIG BIG hint. Then talk to your accountant.
The most you can earn is £5,105 AFTER deduction of expenses. If your partner is not working you can pay them £5105 per year as secretarial services. This will save you £1,123 off your tax bill.
Get yourself an accountant. Without being underhand the allowances you have as self employed are far greater than an employed person, plus your NI contribution will be a lot less. Your local Inland Revenue office will put you on the right track with ref to NI your accountant will do the rest.
You'll pay tax on any taxable income over £5225. What you "earn" and what is taxable are two different things. P & L accounts show what you earn after expenses, but they also include non deductible items such as depreciation. You can "earn" £50,000 pa but not pay any tax if you have sufficient capital allowances etc. See an accountant.
One Step Down from G-d has given you the most accurate answer that not even I can improve upon. ;-)
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