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At present, the situation with my self employedness is: I get paid, at the end of the tax year (April) I fill in a return, and then will get a bill for tax due on any profits I make. If this was my only job, then I would almost 100% certain come under the tax-free limit of £4300-ish, but as it's a 2nd job, I'm earning over that and am taxed on the profits.
I got to thinking - what happens if I make a loss? Obviously I won't be liable to pay any tax because I won't have any profits to be taxed on.
So - I do the jobs, get paid a fee, make a paper loss (so that 'fees paid' minus expenses such as mileage, printing costs, share of Internet bill used for MSing, any business related expenses I can find = negative number), I can then offset that loss against tax paid on my full time job, meaning I pay less tax on my day job, and continue to get the freebies I've come to expect with the MSing, but still get some cash paid into my bank account.
It wouldn't be too hard to engineer. I do a hefty amount of mileage for some jobs, and my "jobs awaiting payment" page of the spreadsheet shows that right now, fees awaiting payment comes to £365, but allowable expenses (basics such as mileage and printing) come to £282. If I were to add on some other allowable expenses, I'm sure it wouldn't be too hard to make that a loss.
As a good example of what I mean: My "Jobs awaiting completion" page shows that my fees will come to £97.58, but allowable expenses are currently £110.20. OK I have included a share of mileage to Shrewsbury on there (hey, I'm doing some jobs whilst there and Jane's at work - I'm allowed to do that!) which has pushed up the mileage claims quite considerably but still :) You get the idea,
Another way of doing it would be to start taking lower paid jobs, also maybe ones which don't pay mileage but which are a large distance away - which means the fees payable column goes down in value, but the expenses allowable column stays the same or increases. Yes I get paid less in fees, but does the offset in reduced tax payable on my main job cover that? I don't know how to begin working that out! Is it even worth bothering?
The feeling of having all this money waiting to be paid into my account is rather yummy :) I just wish it was there now, rather than having to wait!
I got to thinking - what happens if I make a loss? Obviously I won't be liable to pay any tax because I won't have any profits to be taxed on.
So - I do the jobs, get paid a fee, make a paper loss (so that 'fees paid' minus expenses such as mileage, printing costs, share of Internet bill used for MSing, any business related expenses I can find = negative number), I can then offset that loss against tax paid on my full time job, meaning I pay less tax on my day job, and continue to get the freebies I've come to expect with the MSing, but still get some cash paid into my bank account.
It wouldn't be too hard to engineer. I do a hefty amount of mileage for some jobs, and my "jobs awaiting payment" page of the spreadsheet shows that right now, fees awaiting payment comes to £365, but allowable expenses (basics such as mileage and printing) come to £282. If I were to add on some other allowable expenses, I'm sure it wouldn't be too hard to make that a loss.
As a good example of what I mean: My "Jobs awaiting completion" page shows that my fees will come to £97.58, but allowable expenses are currently £110.20. OK I have included a share of mileage to Shrewsbury on there (hey, I'm doing some jobs whilst there and Jane's at work - I'm allowed to do that!) which has pushed up the mileage claims quite considerably but still :) You get the idea,
Another way of doing it would be to start taking lower paid jobs, also maybe ones which don't pay mileage but which are a large distance away - which means the fees payable column goes down in value, but the expenses allowable column stays the same or increases. Yes I get paid less in fees, but does the offset in reduced tax payable on my main job cover that? I don't know how to begin working that out! Is it even worth bothering?
The feeling of having all this money waiting to be paid into my account is rather yummy :) I just wish it was there now, rather than having to wait!
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