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Thread: I think the end may be nigh for me

  1. #11
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    Quote Originally Posted by Jim - Scotland's Party DJ View Post
    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.
    Sadly, there's not much that can be done retrospectively, so I'd definitely recommend seeing an account asap. When your income hits higher rate, you have to plan ahead to minimise tax. It's a nice problem to have. If you're only actually making £325 (£195 - pre-tax) out of a £600 gig, then it might also be worth looking at the costs/overheads of your business as that'd give you more to take home. I know mine are nowhere near the 45% mark.

    Having said that, on paper, they're more like 60%! But a very significant proportion of those are money that would be spent anyway - i.e allowance for home office, telephone(s), broadband, mileage, etc and not costs that would go away if I wasn't DJ'ing.

    Probably worth taking time out to reflect....

    Julian
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    Weddings, Birthday Parties, Kids Parties, School Disco's, Quizes and more

  2. #12
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    Quote Originally Posted by DJ Jules View Post
    Having said that, on paper, they're more like 60%! But a very significant proportion of those are money that would be spent anyway - i.e allowance for home office, telephone(s), broadband, mileage, etc and not costs that would go away if I wasn't DJ'ing.
    Do you have an accountant yourself?

    Costs that you'd incur anyway therefore aren't business expenses. Mileage should only apply to purely business travel.

    And the allowance for a home office isn't overly generous.

    I struggle to see how 60% would be through costs thay would be incurred anyway. If you don't have an accountant I'd recommend getting one.

  3. #13
    MDD Supporter Vectis's Avatar
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    Just adding to the pension idea now that there's a bit more "meat on the bones".

    If you run the accounts and DO suddenly find yourself with the prospect of an unpalatably large tax bill, and have access to the necessary readies, it might be worth throwing a chunk into your pension instead to drag you down an income tax bracket (IIRC the maximum yearly contribution is £40k and there's always the 'carry forward' rules meaning you can roll up any unused allowance over the past 3 years - although it doesn't sound like you'd be needing this ... yet ). Doesn't have to be the employer pension - you could in theory add to or start a new private pension too.

  4. #14
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    Quote Originally Posted by rth_discos View Post
    Do you have an accountant yourself?
    After advising several times on this post that EVERYONE should get one, funnily enough, I do.

    And yes, I'm aware of the rules, and I'm not claiming for personal mileage. My point is that the allowance of 45p/mile is set to factor in all sorts of costs beyond fuel to cover the cost of the vehicle, maintenance, etc. The reality is that these are almost all sunk costs that would be incurred anyway, even without the disco (other than depreciation, but realistically, the disco mileage and wear and tear isn't impacting on the vehicles residual value that much). Because of this, mileage effectively becomes a 30p/mile tax break (fuel is roughly around 15-17p/mile). If I stopped doing disco's, I'd still need a vehicle.

    This is one major benefit of being a small business, a lot of expenses are shared costs (i.e. money I'd have to spend anyway). If I were a much larger business, expenses like premises and vehicles would be "real" costs (i.e. only incurred because of the business) and would go away if I packed it in.

    Julian
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    Weddings, Birthday Parties, Kids Parties, School Disco's, Quizes and more

  5. #15
    Senior Member Jim - Scotland's Party DJ's Avatar
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    After last night's gig I might just pack it in anyway - when she said 'we're not really dancers' she wasn't joking

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    Quote Originally Posted by Jim - Scotland's Party DJ View Post
    After last night's gig I might just pack it in anyway - when she said 'we're not really dancers' she wasn't joking
    Don't start with " Mine was worse than yours", cos it's no contest.
    Excalibur. Older than the average DJ.

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  7. #17
    MDD Supporter Steven's Avatar
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    As mentioned i'd be looking at becoming a Ltd Company.
    pay the low CT rate, keep profit in the business until its worth taking it out via a dividend.
    Also id be visiting all the DJ related conventions in nice countries i possibly could...
    North East Wedding DJ - www.stevenmaddison.co.uk - covering Newcastle Sunderland Durham and the surrounding areas.

  8. #18
    Senior Member Jim - Scotland's Party DJ's Avatar
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    Quote Originally Posted by Steven View Post
    As mentioned i'd be looking at becoming a Ltd Company.
    pay the low CT rate, keep profit in the business until its worth taking it out via a dividend.
    Also id be visiting all the DJ related conventions in nice countries i possibly could...
    I know a lot of guys dig it but I personally know 1001 things I'd rather be doing with my time in Vegas than hanging about DJ seminars

    I've had a look into going Ltd and the problem is still that my 9 to 5 just about pushes me into the higher bracket, not by a lot but I'm still sitting there so tax on any dividends over the allowance would still be 38.1% as opposed to 40% - by time you factor in accounting, banking and so on that difference would be largely wiped out.

    Also, I don't really want to be sitting on that money for years before taking it out in one big sum that I'd still need to claim on anyway - we're comfortable and the DJing is for fun money. It's no good bursting my pan and driving home at 2 in the morning thinking: "forget the Caribbean again this year but, this dividend I'm growing will be very nice when I'm 42 and decide to wrap up the business."

    There's one other option I can see allowing me to keep it going as a working concern possibly but I'll need to speak to an accountant.

    Going to enjoy a month off after Saturdays wedding, see what the final bill is like - I may be pleasantly surprised, one can dream - and then take it from there.

  9. #19
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    Quote Originally Posted by Jim - Scotland's Party DJ View Post
    Going to enjoy a month off after Saturdays wedding, see what the final bill is like - I may be pleasantly surprised, one can dream - and then take it from there.
    I still think that having money that you have to pay tax on is not a bad position to be in. I think you might be focusing on what you have to pay out a little bit too much, and forgetting the bit you get to keep There are ways of managing this and you won't know how until you get into the detail of it with someone with some professional expertise (sounds familiar this, right? )

    Ultimately though, you're right, it's decision about whether what you get paid for the hours you work (after tax) makes it worth it to you. If it's not, then it's time to either look hard at your business and think about how you can make the books balance in a way that makes you happy, or look for something else that does.

    Julian
    http://www.bristoldiscohire.co.uk - Quality Disco and Equipment hire for Bristol & Bath
    Weddings, Birthday Parties, Kids Parties, School Disco's, Quizes and more

  10. #20
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    Quote Originally Posted by Jim - Scotland's Party DJ View Post
    Also, I don't really want to be sitting on that money for years before taking it out in one big sum that I'd still need to claim on anyway
    I'd be sitting on it until such point that you're no longer working, and can therefore draw it with less tax implications. But as I say, time to talk to an accountant.

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