THE 25% RULE! - SAVING FOR TAX (SOLE TRADER)

Self employed and wondering what to save for tax? Watch this tip.

In this video Dan runs through what you what to save for tax as a sole proprietor / self employed person (UK).

Dan cover questions including as:

25% ‘tax’ rule
Owners drawings Self employed 'wages'
How to save for tax How much to put aside for tax
What to save for tax
How much tax do I pay (UK)
What tax do I pay as a sole trader
How to pay yourself as a sole trader
Self employed tax
National Insurance for the self employed

..... and more!

#selfemployed #startup #HMRC #tax

If you have any questions on this, please comment below.

You can see more about what we get up to on the following:

Call: 02392 240040

[Elonmuskateer]

I made £14, 500 (overall) 22/23, I have expenses of £8, 000 so no tax bill 😅, but how much NI do I need to pay?

[jameboyy]

Hi there, really great video! But I have a really important question about the calculation!... When you say 25%, do you mean 25% of the earning? or 25% from within the earning?

eg. if I have invoice my client £215, which of the following calculations do I use to set aside 25% for TAX:

1) 215*0.25 = £53.75
or
2) (215/1.25)-215 = £43.00

Thanks again for the informative video. I'd be super grateful if you could help me out with this!

Many thanks in advance,
James :)

[inaminutenow]

Thanks for the informative video. I drive for Uber Eats as a side hustle. Would you say I need to keep 25% of what I earn? Or as you said profits in the video, do I minus my 0.45p a mile then put aside 25% of that?

Thanks again, I hope it makes sense.

[Spirituallyguideme]

If I’m buying a car at £440 pm I do loads of travel with business so like 400 miles pw possibly 200 miles pw on personal so totally 600 pw

Get can claim fuel maintenance and insurance extra

What can I claim on actual car payment

[HS-srww]

This is crazy how the Gov takes 25% taxes for sole trader if i get your info it's worse than being an employee.

[jesse]

You mentioned the 25% rule only applies if you're earning under 50k, does that include your standard 9-5 as well. What I mean is, are you saying that the 25% rule does not apply if your side hustle + 9-5 income = £50k; on the other hand, as you saying if you are solely making £50k profit from your side hustle and not in combination with the 9-5?

[MyJammy]

I think iknow the answer but I get abit confused, is it 25% of turnover to put to one side or 25% of profit

For example. If I sold an item for £50 would I put £12.5 into my tax saving account

Or is it. if I sold an item for £50 and the profit on the item was £25 would I put £6.25 into the tax savings account

Thank you

[everything-you-need-to-know]

Hi just a quick question if reinvest all of my profits back in to a business would I still need to pay tax

[callum]

Is VAT classed as a business expense. Ie - tax deductible or is it a completely seperate entity that has to be paid alongside your income tax/NI contributions

[DrBenVincent]

So what’s the rule of thumb for over £50k profit?

[CP-vqcz]

Must I apply for a self assessment or will I be sent one? Thank you in advance 🙂

[kaygee]

Hi there, regarding the £12500 tax free allowance - I am sole trader and also have a salaried job. Will the £12 500 tax free allowance still apply to my sole trader work when I'm calculating my tax for sole trader work?
Many thanks

[egorrotneck]

Will this still be the case after the national insurance rise in April 2022?

[BlamingNargles]

would this apply even paying tax on a second job?

[blade]

Hi, is this still valid this year? Thanks!

[bookssolution]

a Big Thank you, very informative videos.

[gullytube]

Hi, absolutely fantastic videos. I am completely stuck currently and was wondering if you could help. I need to make around £1000 each month to keep my business running I've been trying to work out how much to pay myself. Would this be correct, I need to make a total of £1000 for stock, then £250 for tax and anything over £1250 I can then pay myself? I'm so confused with it all. Do I need to pay tax on wages? Any help would be appreciated. Thank you!!

[projecthanami]

Hey, is it possible to send you an email as I have some queries and I was wondering if you could give me some tips. Thanks.