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Original poster

To earn over £50k or not

30 replies

Joyfullife2 · 29/01/2025 17:44

I'm self employed and getting close to earning £50k this year. I am also planning on becoming single this year from an abusive relationship so will be a single mum with a soon to be 3 year old that is in nursery.

I could essentially stop working now and not go over the £50k tax threshold as I have savings.

Could someone explain (in simple terms!) if I should aim to not go over £50k? Or what the implications would be if I did.

I also want to try and buy my STBX out of our house so I do need to earn as much as possible so I get the mortgage in just my name.

OP posts:
strawberrybubblegum · 01/02/2025 10:48

Do speak to a mortgage broker as well, especially if you'll need a new mortgage to buy your ex out.

L & C are a good mortgage broker, often recommended for small company owners because they usually know what each of the different mortgage providers normally accept/don't accept. They don't charge you directly: they get a commission from the mortgage provider when you take out the mortgage (which you're obviously not obliged to).

For a Ltd company. mortgage providers usually ask for 2 years accounts.

I don't know what's needed for a sole trader- or whether some mortgage providers would still consider those sole trader earnings if you had recently switched to a ltd company.

You might need to wait until you have the new mortgage to switch to a Ltd company!

strawberrybubblegum · 01/02/2025 11:21

And well done for getting your self-employed income up to £50k!

Original poster
Joyfullife2 · 01/02/2025 14:24

strawberrybubblegum · 01/02/2025 10:34

With a turnover of £50k, look into whether you'd be better off changing to a limited company. There's more admin, but it would probably save you tax:

https://www.gosimpletax.com/blog/should-you-switch-from-limited-company-to-sole-trader

If you switch, be sure to look into how to be tax efficient, eg by taking dividends as well as salary.

There are lots of things you can look at: eg depending on your business, you could look at joining the flat rate VAT scheme (you can register for VAT even if you're below the threshold - but do consider that your clients will then be paying VAT, so it's only a good idea if they are themselves VAT registered companies who could offset it). You can offset expenses against profits to reduce your tax. And things like the 'cycle to work' scheme is open to you, which is great if you cycle.

Buying your house through the company is unlikely to be a good idea though. Companies pay much more tax on a property than you do on your home.

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Thank you this is all great advice I will look into this.

OP posts:
Original poster
Joyfullife2 · 01/02/2025 14:26

strawberrybubblegum · 01/02/2025 10:48

Do speak to a mortgage broker as well, especially if you'll need a new mortgage to buy your ex out.

L & C are a good mortgage broker, often recommended for small company owners because they usually know what each of the different mortgage providers normally accept/don't accept. They don't charge you directly: they get a commission from the mortgage provider when you take out the mortgage (which you're obviously not obliged to).

For a Ltd company. mortgage providers usually ask for 2 years accounts.

I don't know what's needed for a sole trader- or whether some mortgage providers would still consider those sole trader earnings if you had recently switched to a ltd company.

You might need to wait until you have the new mortgage to switch to a Ltd company!

Thank you. I have spoken to a mortgage broker who said she's knows a company who will accept one year. To buy him out I'll have to use my latest year or I've no chance.

OP posts:
Original poster
Joyfullife2 · 01/02/2025 14:28

strawberrybubblegum · 01/02/2025 11:21

And well done for getting your self-employed income up to £50k!

Edited

And thank you. It's been a hard slog. Especially as I have three young children's and no help with childcare. Hard hard slog. I had over £10k in credit card debt to pay off from my last two maternity leaves too so it was a relief to pay that off.

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