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Company Tax as a Student?
Former Member
Posts: 1,876,323 The Mix Honorary Guru
Hey,
A friend and myself have recently set up a small web design company to do some work for local companies. I was just wondering, as we are uni students, do we still have to pay tax on what we earn and how we would go about this.
Cheers.
A friend and myself have recently set up a small web design company to do some work for local companies. I was just wondering, as we are uni students, do we still have to pay tax on what we earn and how we would go about this.
Cheers.
0
Comments
You'd need to speak to an accountant or small business financial advisor.
Sole traders and partnerships are subject to the income tax legislation. Ltd companies are subject to corporation tax and the company directors are subject to income tax on their remuneration and dividends. The national insurance rules for company directors are also different to standard employees.
But yes. Whatever form of business you are, you will have to complete tax returns, even if you have nil tax liability.
Does that help?
That's only if you are a limited company.
Sole traders don't need to AFAIK.
Yes sole traders and partnerships do, but only with HMRC. You need to register youself / the business within 3 months of trade commencing or penalties can be charged. I don't know how much the penalty is for late notification is unfortunately.
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PM me with any questions you may have.
Your advice is a little off the mark Makoto. You are correct in thinking tax may not be payable until you exceed the thresholds, but HMRC still have to be aware of the business being in existence. Therefore even if the original poster didn't exceed £5035 in during 05/06 or even made a loss, he would still be required to complete a self assessment return (assuming he is self employed). Losses from his self employment can be offset against employment income, or carried forwards to future years so it's probably in his benefit keep it all above board.