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Think yourself lucky you're not paying VAT too.....
Have you got an accountant? If not, get one! They'll give you all the tips about what you can and can't claim which can reduce your income on paper and keep your tax bill down.
There's a bunch of other ways of manipulating your tax bill (not avoiding, just controlling it). E.g. going limited, entering into partnership with someone else in your household, etc, etc.
Julian
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Originally Posted by
DJ Jules
There's a bunch of other ways of manipulating your tax bill (not avoiding, just controlling it). E.g. going limited, entering into partnership with someone else in your household, etc, etc.
Julian
Wot he said...
It's not your DJing income that's being taxed at 40%, it's the part of your COMBINED income over the threshold that's being taxed at 40%. It's far more visible with your DJing because you have to manually pay the taxman whereas your teaching income is PAYE so it happens 'under the hood'.
Is there any scope to significantly increase pension contributions as that will reduce your taxable income? Earn it now, spend it later. Could be a private pension, doesn't have to be the LEA one.
Or might you really be looking for an excuse to drop the DJing despite professing to love it? You could always put your prices up to give you what you feel to be a fair return 'per gig' whilst accepting that the frequency may very well go down.
Just thinking aloud...
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Time to chat to an accountant and a wealth managment advisor.
I'd be operating your DJ business as a Limited Company.
19% corporation tax - and nothing stopping you leaving that profit in the business.
As has been mentioned, you could make increased contributions to a pension for example. Equally, touching on your personal life, are you married? Does your other half work? If not, they can take a salary out of your business for example (might as well use their tax free allowance if it's not being used).
I had wrongly assumed wealth management advisors were for people with millions sat in a bank - but they're not - they're for people paying higher rate tax. They'll work with you to make the most of your money.
Last edited by rth_discos; 11-10-2019 at 08:22 AM.
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Originally Posted by
Vectis
Wot he said...
It's not your DJing income that's being taxed at 40%, it's the part of your COMBINED income over the threshold that's being taxed at 40%. It's far more visible with your DJing because you have to manually pay the taxman whereas your teaching income is PAYE so it happens 'under the hood'.
Is there any scope to significantly increase pension contributions as that will reduce your taxable income? Earn it now, spend it later. Could be a private pension, doesn't have to be the LEA one.
Or might you really be looking for an excuse to drop the DJing despite professing to love it? You could always put your prices up to give you what you feel to be a fair return 'per gig' whilst accepting that the frequency may very well go down.
Just thinking aloud...
I know it's part of my combined income (I have a fair bit of accounting education behind me) but the fact of the matter is that my 9 to 5 gig puts me into the bracket and then any DJ income gets battered over and above it - if I wasn't DJing, that tax wouldn't exist.
Pension wise I could overpay but I'm that sceptical about how the system will actually look if / when I get to that age, I'd rather not. We are significantly paying more into the mortgage and looking to be mortgage free by time we hit 40 so that will give us a lot of financial freedom at that end but it doesn't really help matters here.
Not looking for an excuse to jack it in. I can't see myself doing it into my 50s but I love it, if I didn't I'd have wrapped it in years ago. Price wise my average gross per gig is over £600 which is on par with the best non-celeb DJs up here, in fact I'm dearer than quite a few of them so that's not an issue either unless I wanted to focus on doing a handful of full day weddings and nothing else but I really don't want to do that. I don't think the market would bare a rise significantly more than what I'm already charging for the evening stuff so I'd end up still plodding along but with a lot less work and a lot less dough.
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That is one of the reasons I became a full-time DJ. It wasn't totally by choice but going out 9 till 5 Monday to Friday, then working over a weekend resulted in very little extra £££. Admittedly I didn't explore all options as apart from anything I wanted more time off.
I think most people DJing part-time will be in the same boat as you and it is annoying.
Now I have the issue of VAT which I am having to very closely avoid, it seems that you just start to make a decent living and a brick wall is there to knock you back down.
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Originally Posted by
ppentertainments
That is one of the reasons I became a full-time DJ. It wasn't totally by choice but going out 9 till 5 Monday to Friday, then working over a weekend resulted in very little extra £££. Admittedly I didn't explore all options as apart from anything I wanted more time off.
I think most people DJing part-time will be in the same boat as you and it is annoying.
Now I have the issue of VAT which I am having to very closely avoid, it seems that you just start to make a decent living and a brick wall is there to knock you back down.
Yeah it sucks. Up until April there I still had a good chunk of my PAYE under the 40% threshold so I got a decent bit taxed at the lower level before we hit 40, now I'm just at the point I'm thinking - 40p from every pound of profit I make DJing from here on in goes right to the tax man.
I'm filing my return today then I'm away to Ibiza on Sunday so I'll have a bit of time to decompress. Once the bill comes in I'll see where I stand but thanks for the advice gents, I'll definitely be seeking proper financial advice - there's nothing else I can really do with the expenses that I'm already claiming but if there's structural ways I can find a work around then I'd be happy to investigate that.
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Web Guru
Originally Posted by
Jim - Scotland's Party DJ
I know it's part of my combined income (I have a fair bit of accounting education behind me) but the fact of the matter is that my 9 to 5 gig puts me into the bracket and then any DJ income gets battered over and above it - if I wasn't DJing, that income wouldn't exist.
Fixed that for you
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Web Guru
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