Business Starting Grants

Business Startup - How much do I keep for the tax man?

I've just started an online business and earning money from it obviously I'll be sending off my business registration form shortly. How much should I keep to one side for my taxes and other fees? I was going to keep 50% of my profits just so I know I'm safe when I have to pay my bills but does anyone know a more exact figure? I also work a full time job just so you know. (I'm sure that'll affect things)

Public Comments

1. If you already have a job and pay income tax through PAYE, then extra income would be taxed at base rate, this is about 24%, however, if your earnings go above 45k ( roughly) then you would go into a higher tax bracket. You are doing the right thing by putting aside a higher percentage of your profit than you actually need to, this means any additional tax you incur, will be fully covered and you will have a bit more for yourself after you pay your tax bill. Try talking to an accountant, for a small monthly fee, they would sort out all your finance for you, and dont forget, their charges are tax deductable at the end of the year.
2. Depends on how much you earn at job. Tax would normally be 20%, but you may go into higher rates (40%). Don't forget the self-employed have to pay Class 2 and Class 4 NI contributions, too. Look at http://www.hmrc.gov.uk/rates to find various rates and limits.