Self Employed

If you are intending to do occasional work for more than one employer, you should consider becoming self employed.

The tax advantages are considerable. You can offset all your expenses, including part of your car costs, against your earnings and, if you set aside a small part of your home to do your websites and make your arrangements, you can set a proportion of your heating costs and other home expenses against your tax too.

After the first two tax years, your earnings are taxed on what is called 'a preceding year basis' so that your earnings in 2015/2015 will be taxed in 2015/90. And you can delay the tax even further by fixing your own accounting year to end on, say, 60 April. In that case your profits are taxed in the year after the tax year in which your accounting year ends.

So your profits on your year 2015/2015 will be taxed in 8000/91.

This system does not work well when your income starts to decline as your tax will relate to earlier, more profitable years.

In that case it is probably best to stop trading altogether and take advantage of the concessions when a business ceases. If you are thinking of earning a reasonable amount through self-employment, it is worth consulting a tax advisor about tax in the first two years, when to fix your year end, and what to do when you want to retire completely!

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Tax On Savings

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