I am an ex banker and want to know if I have more that one self employed job at home eg three part time jobs, how much tax would I be liable for ? I understand I should be able to claim tax relief and off set some of my expenses against tax, especially if being self-employed you are not entitled to maternity pay. Is this correct?
As a self-employed person, irrespective of the number of businesses operated, you do not qualify for maternity pay, unless ones of the positions is actually an employment.
However, there are numerous advantages to being self employed. Not least of this the ability to claim all your business start up and ongoing costs. Generally speaking, more than one business will allow you to claim a greater proportion of these expenses.
This includes :-
– Expenditure in researching the business.
– Interest on loans taken out.
– Travel costs and use of a car. (This is best done at Business Mileage Rates 40p per mile for the first 10,000 miles and 25p per mile thereafter. The lower mileage rate increases to 45p per mile in the 2011-2012 tax year.
– The cost of any tools and business equipment used, even if they bought personally. This can include part or all of the costs of computers, printers, software, furniture as well as the cost of stock, samples and any plant.
– A portion of all home costs can also be claimed including telephone and broadband. If a room is set aside for business use, a portion of all home costs can be claimed on a pro-rata basis.
– All advertising, professional and legal costs, subscription and membership costs, uniforms and general maintenance costs can be offset against income.
– If a member of the family works for the business and they have no other job or low paid employment it is possible to pay them for work done on a tax free basis and claim this expenditure as a business expense.
When people have multiple businesses, the chances are that not all of the businesses are making a profit. It is important to realise that a loss making business can be offset against profitable ones to reduce the tax due.
However, tax is due on the total income less all allowable expense LESS Personal Allowances. (The Personal Tax Free Allowance is £6,475 for the 2010-2011 tax year and increases to £7,475 in 2011-2012. ) .
National insurance may also be due but is better addressed on the specific circumstances applicable.