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I.R. query.........My DP became self employed Monday just gone but.....

(12 Posts)
biglips Wed 05-Sep-07 17:40:11

i do need to contact the IR about the changes but Dp doesnt know what he be earning per year.

Do i just keep their money to one side just incase?, once weve got the idea of how much hes earning?

He reckons about the same as we are on now

policywonk Wed 05-Sep-07 17:42:55

You're allowed a certain amount tax free - about £4,800 I think - and then after that, reckon on putting aside about 20 per cent of anything he earns, or 25 per cent if you want to have a bit left over. Put it in a savings account or somewhere where you won't touch it. Also, he'll need to sign up to pay National Insurance Class 4 (I think?), but that's only about a tenner a month, and you can pay as you go.

biglips Wed 05-Sep-07 17:44:04

so DO i need to ring the IR now?

policywonk Wed 05-Sep-07 17:48:37

You'll need to register him as self-employed, yes. It's just a matter of filling in a form - you might even be able to do it online.

Wisteria Wed 05-Sep-07 17:51:20

Current tax free is £5030, look on his tax code from last payslip to be sure as some are different but as PW said start putting at least 25% aside. He must have some idea of what he will be earning, did he have a business plan?

Don't forget your first tax return will be due in January 2009 when you will need to pay your tax for the year Apr07-Mar08 as well as a further 50% of it for the following year. If he has only just gone SE he was probably on PAYE before and may well have already reached his tax threshold for this year.

You need to call them to let them know what's happening and he needs to register as SE anyway.

Eddas Wed 05-Sep-07 17:53:41

Tax free amount is now £5,225. Put aside 20% of all and that should cover the tax/NI, may well be too much but best to be on the safe side. Unless of course he will earn mega bucks(get into 40% tax) then you'll need to put by alot more.

Make sure you watch what they give you for tax credits though since they have a habit of cocking it up for SE people!

And agree that you DO need to tell them NOW. You get a certain amount of time to tell them once you've become SE, can't remember how long, a monthhmm, might be 3 monthshmm anyway if you do it now you'll be fine

policywonk Wed 05-Sep-07 17:55:16

Wow, the personal allowance is going up by the minute. At this rate I won't have to pay anything at all this year... grin

Eddas Wed 05-Sep-07 17:56:12

grin i'm right thoughwink [[

Eddas Wed 05-Sep-07 17:57:11

der meant to add a linkhmm look atthis

Wisteria Wed 05-Sep-07 20:09:47

Yes, sorry, just did last years! £5225 for this year blush

charliecat Wed 05-Sep-07 20:17:33

I registered as SE in May, I havent been asked for N.I that right or should I be chasing them?

Wisteria Wed 05-Sep-07 20:20:18

You will be asked CC, but it could be a while - there's a helpline number you can ask about it it's on the HMRC website. I would, personally as I like to know where I am with my money but it's up to you, you can always backdate your payments.

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