Taxes

[vikiwizz]

Hi

I'm new to the forum, I'm working as a Nanny at the moment but I am also fully registered as a childminder.

It's all a but mind boggling to start with as there is so much to do, but my first question is (of which I'm sure there will be many ;) )
How do you separate your taxes that will need to be paid? Do you would out a percentage off every payment and put into a separate account? If so how much should I be doing percentage wise?

[sarah707]

The best practice advice is that once you start getting near the tax limit for earnings you put away 20% for tax and 9% for NI every month.

Then if the bill comes you can cover it - and if not you have a little bit of rainy day money put by.

Hth :D

[vikiwizz]

Thank you, so once close to limit which is now? I need to put away close to 30% every month?

[Pjs]

Please excuse me for being thick- so do I put aside 20% tax and 9% NI off of the total income each month or is it the income after expenses? E.g in January I earnt £500 but had £160 expenses. Do I put aside 20% of £500 or 20% of £340?

[Koala]

You only pay tax on your profit and not your income.
So £500 income less £160.00 expences leaves taxable income of £340.00.

[Pjs]

Thank you :)

[jackie 7]

Bit as Sarsh says if you put toouch money aside you have a bonus. A holiday perhaps. Wish I had done it though. The first year you earn over a certain amount you have to pay double for that year and next. Called pay foreward I was very badly caught out. So be prepared.

[MessybutHappy]

Ooh, top bit of info, thank you Jackie!