Author: Chris Neame BFP FCA CA(ANZ)
Introduction
Venturing into side hustles through a limited company structure is an exciting way to diversify income and pursue personal interests alongside your main career. This FAQ guide covers the essentials of what you need to know to navigate this journey successfully.
Understanding Side Hustles
Q: What exactly qualifies as a side hustle through a limited company?
A: Side hustles through a limited company can range from freelance services, property rental, selling goods online, producing digital content, to providing personal services such as consulting or tutoring.
Q: Why might I consider initiating a side hustle?
A: Initiating a side hustle can enhance your income, enable you to explore your passions further, and assist in achieving specific financial objectives.
Tax Obligations and Compliance
Q: What are my tax responsibilities for a side hustle operated through a limited company?
A: Profits from your side hustle will be subject to Corporation Tax. Additionally, you need to understand how dividend taxation applies to any income you take from the company beyond the tax-free allowance.
Q: How can I ensure my side hustle complies with UK regulations?
A: To ensure compliance, register your business with Companies House, stay current on Corporation Tax responsibilities, and maintain precise financial records.
Operational Considerations and Maximising Benefits
Q: Can business expenses be claimed to reduce tax liabilities?
A: Absolutely. You can claim legitimate business expenses against your company’s profits to reduce taxable income, including considering VAT registration if your turnover is above the threshold.
Seeking Professional Guidance
Q: Is it advisable to seek professional advice for managing my side hustle?
A: Yes, leveraging the expertise of accountants and tax advisors is highly recommended. They can offer tailored advice to ensure your side hustle is tax-efficient and compliant with all regulatory requirements.
Conclusion
By understanding these key aspects and seeking appropriate professional advice, you can navigate the complexities of managing a side hustle through a limited company effectively. This approach not only ensures compliance but also maximizes the financial benefits of your entrepreneurial efforts.
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About Neame & Co
At Neame & Co we specialise in stress free company filing: the easy way to file your year end Company Accounts and Corporate Tax Return to Companies House and HMRC. Maximise tax efficiency, real human support throughout and 100% online and paperless service. Visit Neame & Co for more details on how we can help!
