Tax question (any accountants here?)

Right, so, say you are paying the basic rate of tax and NI through PAYE via your normal employment.

Then, say you earn additional ?10,000 a year as a freelancer.

How much of that extra ?10,000 do you need to put aside for tax and NI? Assuming this extra income still keeps you within the basic rate of tax, is it as simple as saving 20% of it for income tax and 12% of it for NI? So, 32% in total?

Or not?

Posted By: duke of york on September 14th 2011 at 10:38:21

Message Thread

Tax question (any accountants here?) (General Chat) - duke of york, Sep 14, 10:38:21
- Set up a Ltd Company for your freelance work. (General Chat) - tudders, Sep 14, 12:53:54
  - Boooooo! stone the nasty tax dodger ^^^^ (General Chat) - Ralf Scrampton, Sep 14, 13:01:20
    - I put a bit back where I can. (n/m) (General Chat) - tudders, Sep 14, 13:10:38
  - Is it worth it for ?10k income? (n/m) (General Chat) - duke of york, Sep 14, 12:56:54
    - About 1600-1700 quid by the sound of it... (n/m) (General Chat) - BerlinCanary, Sep 14, 13:05:33
      - Or roughly half, if that makes it sound better. (n/m) (General Chat) - tudders, Sep 14, 13:09:48
        
        that could pay for winter fuel allowance for 17 OAPs (General Chat) - Ralf Scrampton, Sep 14, 13:28:16
        
        Indeed. Or approximately 10% of what it costs me to look after my Mrs. (n/m) (General Chat) - tudders, Sep 14, 13:42:48
- Think of ?10 an hour, as ?6 an hour (General Chat) - pants, Sep 14, 12:45:32
  - It's quite gutting isn't it... (General Chat) - duke of york, Sep 14, 12:49:40
    - Yeah, the way I do it, is 33% is tax, and 7% is NI. So roughly 40% disappears (General Chat) - pants, Sep 14, 14:01:33
- well hello there (General Chat) - Tony Martin, Sep 14, 12:05:53
  - = "Roughly a third" (General Chat) - Arizona Bay, Sep 14, 12:14:09
  - That's wrong (General Chat) - Butterworth, Sep 14, 12:13:38
    - indeed thought he was doing another job, not SE (n/m) (General Chat) - Tony Martin, Sep 14, 12:15:27
      - although no the calc is not wrong - its just done as all employed income (n/m) (General Chat) - Tony Martin, Sep 14, 12:16:32
  - but if you want to get really clever you can save some tax... (General Chat) - Tony Martin, Sep 14, 12:08:09
    - and also if you are "self employed" instead of "employed" for the extra ?10k this will (General Chat) - Tony Martin, Sep 14, 12:13:50
      - Chairs (General Chat) - duke of york, Sep 14, 12:36:14
- Just send it all offshore and take the head of HMRC out to dinner a couple of times (General Chat) - BerlinCanary, Sep 14, 12:02:05
- OK, here goes (General Chat) - Newcastle Canary, Sep 14, 11:30:23
  - Yes, thanks (General Chat) - duke of york, Sep 14, 11:45:59
  - ^^^ = "About a third" (n/m) (General Chat) - Arizona Bay, Sep 14, 11:43:03
  - so what you're saying, is that.... (General Chat) - Cheltenham_Canary, Sep 14, 11:36:01
- Tony Martin is an accountant, he'll be able to find you a loophole or 2 (General Chat) - Ralf Scrampton, Sep 14, 11:00:43
  - Cheers, I will wait until he is about... (General Chat) - duke of york, Sep 14, 11:02:11
- Roughly a third. (General Chat) - Arizona Bay, Sep 14, 10:58:25
- Given the current situation of the country (General Chat) - ghostof barry butler, Sep 14, 10:53:00
  - Hmmm (General Chat) - duke of york, Sep 14, 10:55:50
    - or... (General Chat) - Cheltenham_Canary, Sep 14, 11:09:30
- So much for wisdom of the wrath! (n/m) (General Chat) - duke of york, Sep 14, 10:52:57
- Taking into account basic rate tax, plus income tax and NI contributions I'd say... (General Chat) - Dandy Highburyman, Sep 14, 10:43:15
  - Cock face (n/m) (General Chat) - duke of york, Sep 14, 10:44:37
- 9 grand (n/m) (General Chat) - Cheltenham_Canary, Sep 14, 10:39:23

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