TAX AND NI CONTRIBUTIONS???

Danny,

The subject is confusing and also subject to continual change! In the next few months my business will be up, running, and offering advice on exactly these matters.

You will only pay tax, and NI contributions, on profits of your business. I would say that although the HMRC website is not the easiest to navigate the telephone team responsible for setting up newly self employed's is very helpful. The whole process should take only a couple of minutes.

Legislation states that you have to register as self employed within 3 months of trading. I would advise that you interprete this as 3 months from the date of your first invoice (or incur expenses which you would want to offset against future tax liability). Although mininmal (set weekly amount, 2.20 for 2007/08), Clase 2 NI contributions are due quarterly when you are self employed.

Feel free to email me with any tax or NI related queries.

Best of luck

Steve

steve [dot] sweetlove [at] pay-expert [dot] co [dot] uk