Tax question

[ryaldinhio 4,491]

On 07/05/2019 at 07:52, Francie said:

Anyone clued up on tax that can help me, I got a pay rise in work last october, everything was gran until April this year I got hit with a new tax code, apparently I didn't have to pay as much tax as I had some n.i Contributions built up from previous employment, now the pay rise I got is being swallowed by the taxman, it's a f***ing joke.

I'm not seeing any of it.

I worked hard for the payrise, then for it to be taken off me is a kick in the balls.

Could someone help me way a wee question, the personal allowsnce has risen to 12500 this year, to my understanding, that means I won't get taxed uptown this above amount but over that I'm getting charged 20percent.

I have a business on the side also an it's booming, i thought I might ask my work for "flexible hours" which means I want to reduce my hours by ten hours.

Here's the question, if I reduced my hours to say 29 hours, that would bring me under the threshold of 12500.

Would this then mean I won't have to pay income tax as I'm under the threshold, I understand IL have to pay a bit of n.i.

Could someone clarify this for me, an the extra hours off would give me more time with my business 

Thanks in advance

To answer the original question if you reduce your hours so your income is below the £12,500 lower bracket level you will not pay any income tax on this year's earnings. This does not mean you won't be paying for previous tax years short falls still, you would have to contact HMRC for verification.

Regards your business on the side if you are a sole trader and take an income from this then it will be added to your other income to calculate tax. I expect this would be done at year end when your books are submitted. However if it was a limited company and you were a director you don't have to pay yourself a penny as directors of private limited company don't fall under normal employment law I.e minimum wage etc. If, however your misus or mam or whatever did the company books you could pay them say £12,499 to do that role for the business....as long as they were completing the tasks as described. They then would not be required to pay income tax on this amount if it were their sole income.

If you need anymore PM me

 

[Francie 6,368]

9 hours ago, ryaldinhio said:

To answer the original question if you reduce your hours so your income is below the £12,500 lower bracket level you will not pay any income tax on this year's earnings. This does not mean you won't be paying for previous tax years short falls still, you would have to contact HMRC for verification.

Regards your business on the side if you are a sole trader and take an income from this then it will be added to your other income to calculate tax. I expect this would be done at year end when your books are submitted. However if it was a limited company and you were a director you don't have to pay yourself a penny as directors of private limited company don't fall under normal employment law I.e minimum wage etc. If, however your misus or mam or whatever did the company books you could pay them say £12,499 to do that role for the business....as long as they were completing the tasks as described. They then would not be required to pay income tax on this amount if it were their sole income.

If you need anymore PM me

 

Thanks mate, that has cleared it up a bit, I will pm you tonight after work, cheers