Hey all, first time here.
So, I have been a perm employee all my life, and now have an opportunity to do contract instead, and become self employed. I would be contracted for a single company, and essentially invoice them once a month for a fixed amount (salary like) and any incurred expenses. Pretty straightforward, but as expected many people (friends etc.) have said this that and the other, so now I need to ask a few questions.
The information below are example numbers
1. I charge £4000.00 per month, and I spend £1000.00 in expenses (ave) per month
Do I calculate the HMRC taxable amount on the £4k or on the £4k less expenses (£3k)
Have been told its the £3k
What happens if I have expenses in one month of £3500.00 but my income is only £4k for that month? Do I still maintain that the taxable amount is calculated on the remaining £500.00
So, I have been a perm employee all my life, and now have an opportunity to do contract instead, and become self employed. I would be contracted for a single company, and essentially invoice them once a month for a fixed amount (salary like) and any incurred expenses. Pretty straightforward, but as expected many people (friends etc.) have said this that and the other, so now I need to ask a few questions.
The information below are example numbers
1. I charge £4000.00 per month, and I spend £1000.00 in expenses (ave) per month
Do I calculate the HMRC taxable amount on the £4k or on the £4k less expenses (£3k)
Have been told its the £3k
What happens if I have expenses in one month of £3500.00 but my income is only £4k for that month? Do I still maintain that the taxable amount is calculated on the remaining £500.00
Comment