Ok im just starting up how do i go legal

[dj andy allwood]

remember taxth doesn't have to be taxthing :teeth:

[Dial a disco.co.uk]

Im an accountant so if i can help in anyway let me know

[benlewis13]

dial a disco, as we have just become an LTD company, if we are earning say less than 10000 a year currently, do we have to pay any taxes or NI tax for our company, or for our employees?

[Corabar Entertainment]

The answer is a simple 'yes' - but in reality is much more complex as many factors come into play. Who is this mythical 'we'? What is the '£10,000'? Do you mean the company profits? Do you mean each employee? Do you mean turnover?

My advice to you would be to get yourself an accountant pronto!

[A1DL]

Ben

In full agreement with Angela, get yourself an accountant. As a company director, you will be required to complete a self assessment tax return annually, additionally the company secretary is responsible for filing of the accounts and annual return by the due dates. You will also need to register the company as a new employer, and run a PAYE, ensuring tax and NI (employer and employee contributions) are paid quarterly. There's quite a lot to keep on top of, especially when you're new to it, although it becomes second nature after a few years!

Tony

[DMX Will]

Ben,

Look it like this, you do not want "employees" as such, you want "sub contractors" - the same thing under a different heading basically. You want sub contractors because then you don't have to setup a PAYE system and work through Taxes etc, you simply pay your sub contractor. Technically your sub contractor should be invoicing you for this, so once an amount (say half etc) of the nights earning is agreed to go to your mate or whoever, get them to fill out a simply invoice and do this the same every time you do a disco together.

Keep these invoices as they count towards your company spending. You need to invoice those people you are charging for the disco, and keep a copy of the invoice yourself, with paid dates and methods written down too. You will also need to note down (possibly in an excel spreadsheet or a book) all your expendeture on the disco company, ie new gear, work clothes, cds, music etc.

When the end of the year comes up, you can find out how much your turnover was by adding up the invoices you sent out to your clients (your turn over is basically the money that goes through the company, or rather comes into the company). Once you have done that, you then need to add up how much money you have spent on subcontractors, (which may or may not be half of your turnover.), then add up how much you have have spent on gear/music etc (ie spending) add the two (sub contractor spent and items spent) together and take it away from your turnover.

If like me then chances are that you have spent most of your disco money on new gear/CDs etc at your age. (I'm currently using other forms of income to support the rest of me!!) You may even find that you are into minus figures, ie you spent more on gear/cds in the year than you actually made after sub contractors have been paid.

Your tax is then based around your profit, your profit is the amount left. All of the above is shown below:

INCOME:

5x Disco @ £200 each = £1000
Total Income: £1000
-------------------------------
OUTGOINGS:

New CD Player @ £100
Now 65 @ £15
Black Shirt @ £25
Sub Contractor (Mate @ 50% of Booking Cost) x5 = £500
Total Outgoings: £640
--------------------
Income - Outgoings = £360 PROFIT

Another reason to use your mate or whoever as a sub contractor is because you are not expected to provide things like "a uniform" or black shirt or whatever you wear to discos. It also means there are less complications if you both share the gear ie he does lights you do sound etc.

So remember the TAX MAN will only charge you tax bassed on what PROFIT you make, if its nothing you wont get charged! I'm pretty sure the first TAX bracket is £5,000 anyway, which I'm sure wont be a problem, as you wont be making that in profit in a year.

Hope this helps.

[DMX Will]

Also if anyone can shed light on how this all works out for partners in a bussiness (Tony, I suspect you can!) then it would be greatly appreciated!

Will.

[benlewis13]

Thanks Will, very helpful.

[DMX Will]

Thanks Will, very helpful.

no problemo

[Corabar Entertainment]

Bear in mind that you can't just call someone a 'subcontractor' and make it so: it depends on the situation in which they are being employed. The taxman can decide that they are an employee, even if you call someone a subcontractor, and in that case, you, as the employer would be liable for all their back-tax and NI!!!!!!!!

I am not saying this to scare you Ben - but it really is dangerous for any of us to say 'do this' or 'do that' without knowing all the ins and outs of the way you are operating.

eg - you couldn't call yourself a sub-contractor of the company, could you? However, you do have the choice as a director as to whether to become an employee, or to just take dividends, or both: each have their own tax implications

In our particular situation, employees was by far the better route to go, and if we called our DJs 'subcontractors' and left them to sort out their own tax and NI, then we would end up with a very hefty bill!!!

Then, you've got to look at the tax of the company: the rules regarding corporation tax have just changed - you used to be able to get £10K 'free' so to speak, but Corporation Tax is now payable by the company on ALL profits.

Will - are you operating as a LTD company?