How much tax should a newly self-employed person set aside?

As part of the campaign to help very small businesses cope with tax, HMRC has produced an interactive online tool to help newly self-employed people budget for their first tax bill.  The ‘self-employed ready reckoner’ calculates approximately how much money should be set aside to meet the first tax and Class 4 National Insurance bill. 

It should be noted that it does not automatically calculate payments on the accounts, and Class 2 National Insurance contributions still need to be paid separately.

This tool is for self-employed people who have no other taxable income and who are entitled to a basic personal allowance.  It works on the assumption that the accounts will be prepared to 5 April each year.

Of course, everyone’s individual circumstances will be different and, as such, figures provided by the ready reckoner for one person may not be applicable to someone else with a similar income. It is therefore always best to seek professional advice tailored to your own requirements.

For further information please contact Ward Williams: www.wardwilliams.co.uk