Self-Employed: What You Need To Know

0:02Damo, what are you doing? well while we're waiting for our next podcast episode i'm sat here reading this magazine that's on the table about wallpaper very very quaint very old school you know what i never realized how much i missed those little rip-off sniffy perfume things that are in the middle but yeah i think um magazines are making a comeback mate in a world where everything feels digital and i'm just dying to put down a screen all of the time i quite enjoy sitting down with a magazine and having a read of it it's almost like you know buying a vinyl record yeah feels more real more tangible the music's more authentic it's richer yeah that's right which kind of leads us into today's sponsor one of the best finance publications in the uk is money week they're in print and online so you can get that nice magazine feeling in your hands money week sift and summarize the biggest stories in finance and then add their own journalism on top it means no more endless scrolling if you want to give money week a try you can get six issues in print and on the app absolutely free by visiting moneyweek.com forward slash money.

1:01After your trial, you'll save an extra five pound on a quarterly subscription exclusive to Making Money listeners. That's moneyweek.com forward slash money. And there's a link in the description for you. Side hustlers, sole traders, do you think limited company structure is worth it for people? It's not quite as simple as just saying once you hit 50 grand, limited company. Tom Ashworth is a financial planner and trained accountant. But as soon as you say I'm a director of a company it's like oh wow. First thing you've got to do is figure out your finances and figure out which incomes you have correct.

1:34I can see why you need time in man. I know right. T Unlimited. T Unlimited. That's why you're my boy. That's why I get the big bucks mate. The moment you've all been waiting for. We're finally doing an episode about self-employed people and I've brought along Tom Ashworth who is currently helping me set up a limited company. So very excited. We've got listeners questions for you as well let's get cracking nice mate well done thank you kindly um so our first listeners question is today we're going to start from from dan dan asked at what point does it become economically beneficial to open a limited company rather than just doing a self-assessment i'm gonna take this mic off you now because you're dangerous with it mate i think you're done you're done well there's um if you just google it there's like a very simple answer that you'll get and it's usually around if you're making like 50 grand a year but it's more about like looking it on a case-by-case basis because it depends on the individual because it like for example if you're if you're someone that's employed you're just doing a little bit of like yoga classes on the side and let's say you're earning 48 grand a year if you suddenly do some self-employment that gives you five grand a year you're going to get pushed into that higher rate bracket so even though that business is only making five grand you know we're near that 50 where you should be a limited company as far as google says really there's probably a bit of a conversation there so that you don't crest that horrific 50 grand, you know, higher rate level.

3:12Because obviously then you're paying 40p in the pound for every pound that you make over that. But there's other things that you lose as well. So you lose half of your personal savings allowance. And then, you know, it's even worse if you go over 60 ,000. Because if you've got kids, you start losing child benefit and stuff like that. So with being a sole trader, whatever your revenue is, is effectively your income like minus your expenses and stuff there's no river in between but with a limited company you separate yourself from the revenue and you've got a little bit more say in what your income is because you could you could have that same individual earning 48 grand a year and the yoga limited company makes that five grand it can just stay in the company you don't have to take an income from it especially if you don't need it you know that can just build up and build up in the company instead.

4:05Is it not, on the other side there, the considerations around the administration costs of a limited company, they're significantly higher than being a sole trader? Yeah, that's also one of the main concerns for people and that has been true for a while. But more recently, this whole Making Tax Digital scheme that the government's brought in. And I mean, I can go into sort of what that is. Essentially, for people that don't know, Making Tax Digital is this new scheme where the government wants you to submit, it's not a return, but it's a submission of your revenue and expenses every quarter. So if you're familiar with VAT returns, it works similar to that.

4:44So whatever your quarter end is, you've got 30 days plus a week to then submit what's happened in that quarter. So is this for everyone? Is this for limited companies or for sole traders? So this is just for sole traders. And it's coming in in April 26 for sole traders that have top line revenue of 50K. Will it also come in for limited companies? Eventually. Probably. It'll be this gradual thing where it encompasses everything. But for now, in April 26, if your revenue is 50K, you're going to have to start making these submissions the year after. so April 27 if your turnover is 30k or more and then April 28 it's 20k or more but it's it's revenue so it doesn't really encompass like limited company directors because it discounts dividends so if you're doing everything right in a limited company you've got your director's salary of 12 grand a year and the rest is dividends so that's not going to encompass you but for sole traders you know for a long time it was dead easy because you could just say if you're under 50 grand and you just you know you want to test something you want to do one or two yoga sessions a week you love yoga don't you well it's my mum it's my mum really so i have to i have to use like real life scenarios um i mean i i don't love yoga i can't touch my toes and my mum hates the fact that i can't she's saying you should do it you know because i'm sat at a desk all day my hamstrings as a shot so she's like you need to do it and i know i need to but it's it's fine in the time yeah i got i got like a an injury in my uh tendons i was doing a handstand as you do and i went and um the guy was like yeah it wasn't a handstand mate it's sitting at a desk all day doing this with your mouse has made your tendons shrink and then when you've gone like that and extended it's just like popped it do you know what i mean like yeah so he's like it's it's sitting at a desk he's like more people get tennis elbow from working in an office than they do from playing tennis so yeah I'm right there with you and I should be we should all be stretching yeah it's embarrassing isn't it you know you think you sat at a desk all day and you're explaining to someone that you're injured and they're thinking oh what manual job do you do and it's like oh no I'm just sat around yeah if you don't use it you lose it or whatever they say exactly but yeah the rules of the game have changed now for sole traders and it's you know it was dead easy to just say accounting fees will be a lot less and it's a lot less hassle it's easier to set up and stuff.

7:18And that's a bit of a miscrispiration as well. So you think the cost base for being a sole trader is going up and it will get closer towards a limited company administration because of the making tax digital rules? Yeah, and HMRC haven't helped because it's all very vague as to how it's all going to work. We have an actual listener question on this topic. So John asked, any advice on make tax digital self-assessment which comes in next year would be very useful. I'm really worried about it as I'm going to be above the 50k mark this year which makes me eligible for it yeah well a few a few people have kind of said is there anything I can do to kind of um stay away from it or you know get my income down or something like that and it's like well not really it's kind of counterintuitive to not get as much money in for the sake of just pushing you know kicking the can down the road at least I don't have to do making tax digital till next year but eventually it's going to come in and it's probably better off to get used to it yeah sooner rather than later like you said it's going to get lower like 20k 30k so everyone yeah which is going to be doing it it's going to encompass everyone eventually and you know there's a lot of it's very easy to moan about it you know it's more admin and it's more liaising with the account and and stuff like this but and whilst that's sort of true i want to highlight some of the positives as well because there's always two ways of looking at things yes it's a bit of a pain but I think for the people that aren't organized now it's kind of forcing you to get organized because at the end of the day you are running a business you're a business owner and you should kind of act like one and a lot of people kind of do the job and then you know it's funny when I was an accountant you'd have people come in and they just plonk a big asda bag full of receipts on your desk and I'd be like oh for god's sake it's going to take me two hours to sift through all this and get it in a nice binder and then I can start the work so I think it's going to force people to get organized and at first yes it's going to be a pain it's going to be an entire Sunday afternoon but eventually it'll be a couple hours on a Sunday and then an hour then half an hour then half an hour every month and the positive of that is that you're going to understand your business a bit better as well because you're going to actually start looking at the figures and think i always wondered why january was really like poor cash flow and it turns out all my insurances is due in january and you start to understand like where the money's going and then you can see if your business is is a seasonal business if you've got a dip in you know in the summer you might be let's say you know you feel less guilty about going on holiday and stuff like that so you start to understand it a bit better so i think that's a positive yeah i mean we have like apps where we just take pictures of receipts there and then so you don't have to collect them and then you get rid of them and and and if you do automate there's a conversation with the accountant as well of you're doing less work now so you should reduce your costs we've had that conversation with our accountant we moved to filing our own vat submissions because we we were using software this is through a limited company but it was just like we have to do essentially press a button so why are we paying you 200 quid a quarter to file these submissions and stuff so yeah it makes you understand the business better and the role of the accountant and you can see potential savings I think in terms of administration yourself internally so yeah I think it's probably saved the requirements of a limited company structure have probably saved us money overall the VAT on a quarterly basis is a is an administrative headache that's annoying I would rather not have to do that but you know such is life can we talk about actual setup of these structures then because I think people will be concerned about the cost.

11:00And I think you've addressed that actually what's going to happen is it's going to become a similar cost to be a sole trader anyway. What about the complexity of setup and that process? Do you want to run it through with T, actually? I think you and T have been through this recently. We're going through it currently, aren't we? You've been talking behind my back, you guys. I'm cheating on you, Damo. Seeing other financial advisors. I am not. I'm not a financial advisor, mate. Financial consultants. How about that? No, no. I'm just a guy with a microphone. Just a guy on YouTube. so I understood first I've always been scared about setting up a like I told you setting up a limited company it just looks complicated I'm like it's going to cost me loads it's going to be stressful I don't know what to do I don't want to do it wrong I don't want to get in trouble with the government or the tax man and then you well you're basically going to do it for me but you told me it's not actually that hard and like very importantly it's it's very individual everyone's journey into a limited company so mine would be very different to Damien's very different to someone else who's self-employed.

11:54And one thing that you mentioned, I thought very cool, you can add your partner as a director, which helps the whole household's tax bill go down. But yeah, for actually setting up the limited company, I'm not sure how it goes. So yeah, you can, first thing you've got to do is figure out your finances and figure out which incomes you have, correct? And then talk to someone like Tom who can advise you on the best structure. So I think we're looking at - I can see why you need Tom here, man. I know, right? No, we're looking at me having two limited companies. Oh, look at you. There you go. I know.

12:26So I went from sole trader to like, he thinks it might be better for me to have two. So yeah, it depends on the individual, but I'll let you take it away. Yeah, multi-business. Multi-business. I'm a busy man. Dodgy man. Handsome man. Yeah, I mean, limited company, it's so easy. I don't know where this misconception's come from. Obviously, it's online somewhere. And I think it's probably to do with, you know, it's like a sole trader, your own business, which is daunting enough. But as soon as you say, I'm a director of a company, it's like, oh, wow, you know, what does that mean? And it's kind of you think that it's really complicated.

13:05But for the most part, you know, you go on to a company's house, you decide what the company's called, decide what the shareholders are, who the directors are. And it's like filing a tax return. It's like clicking no 15 times. no I'm not a charity no I'm not a family investment company I'm just I just wanted yoga classes I just wanted you know um so it's it's like you decide the name you fill in some details you decide the shareholders directors you click no 15 times and then pay 50 quid and you're on there you make it sound easy and I have had a limited company in the past which got dissolved um because I didn't so like afterwards I didn't I guess I didn't follow up with the accounts and submit something but then the company got dissolved and we were really making money anyway so i didn't care but i'm sure like there are other things once setting up is easy but then the ongoing maintenance is it just submit an annual return or do you have to do anything else it's pretty similar to be honest um i mean you know you set up a company bank account but you do that as a sole trader anyway um and you've got quite a while to even figure out who your accountant's going to be you know because you can you can trade for a year and then after after that year's finished you've got nine months to file your company tax returns.

14:18You've got a long time before you even need to think about it. I mean, I'd encourage people to think about it quite early, but you have got a lot of time before you need to worry about finding an accountant and chances are you'll know one somewhere through a friend or family member. But it's pretty similar. There's no differences in VAT because whether you're a sole trader or a limited company, VAT threshold's still 90 ,000. so you'd have to file VAT returns either way. So as long as you're making less than£90 ,000, you don't have to worry about VAT. Usually, but there are certain types of services that are VAT exempt.

14:58What's the scariest word in the English language to me? Tax. How does it make you feel, mate? Stressed, sweaty palms, squeaky bum time, don't like it. Mum's spaghetti. Mum is spaghetti, yeah, exactly. You've got one shot, one opportunity to not go to jail for avoiding tax. Like, yeah, no, I don't like tax. It's scary. Tax can be really stressful, which is why we're excited about our partnership with TaxApp. They started in Ireland and now they're in the UK and they make self-assessments way less scary. What I like is how quick it is. You just enter your info, connect your bank, and it helps you do your expenses to reduce your tax bill.

15:30You suddenly know exactly what you owe, no waiting around for an accountant to reply, and you can file in as little as 15 minutes. Yeah, and it's built for all kinds of people. Company directors, freelancers, the self-employed, side hustlers, or even people who work full-time who need to do a self-assessment. For example, anyone who needs to claim back high-rate tax relief on their pension at work. They're HMRC recognised, so they're safe to use. Plus, TaxApp flags reliefs and benefits you might miss, so you're not leaving any money on the table. And they're really reasonable too, so from just£89, you can have your self-assessment sorted.

16:00If you've got to do one this year, check out TaxApp. You can get 10 % off as well using the code in the link in the description. The code is MONEY10, so that's M-O-N-E-Y-1-0. okay next listeners question let's get it going um ninja jdm sounds just like me um this is how i felt wrote what's the best way to manage your money when you're self-employed and your income varies month to month i've seen lots of budgeting advice like the 50 30 20 rule but it all seems aimed at people on paye amen some months i need to take out more to cover essentials other times I can save or invest. Plus, I have to save for tax, pensions, and keeping enough in the business.

16:40It feels like there's a lot to juggle and no one really teaches you. That's literally what I said to you when we first met. Yeah, yeah. A lot of people have this problem, especially the self employer, because it can, you know, you've got seasonal businesses where you might do really well during Christmas or another business might do really well during the summer. You get commission and it changes, your salary changes every month. Exactly. Yeah. Or you might do really well if there's a Bitcoin run. and things like that you've definitely been speaking to Tim do you know Bitcoin's running at the minute anyway carry on sorry but yeah so you have to try and replicate employment I think um so you have to get some kind of consistency um and the best way especially with a limited company is understand your own costs how much does it cost to support your lifestyle and you know if that's three grand a month withdraw that three grand a month from the company no matter if you make five or if you make two because those months that you make five you're going to build up a nice pot in the company so where you can keep that consistency and i think that works when you've got the same monthly expenses every month but of course people pay the car insurance annually and stuff like that so it's almost like having an emergency fund in the company but also have an emergency fund personally as well to cover those one-offs that come up or you can try and absorb that in in the monthly um income that you give yourself but that's that's another positive about the limited companies you've got so much more flexibility on what you pay yourself because if you take someone that's earning let's say they've got a let's say they're a sole trader and they're just a business owner and they're making 80 grand a year but in their personal life they're quite frugal they only spend 30 grand a year because as a sole trader that revenue or you know minus your expenses that profit is immediately your income you're going to get whacked for 40 percent and you don't actually need all the money because you're only spending 30 grand so this is why it's great on a case-by-case basis it's not quite as simple as just saying once you hit 50 grand limited company because this person they could have it in the company make that 80 grand profit and just pay themselves the 30 which is what they need and keep the rest of the profit in the company and not have to pay 40 percent every year they can just give themselves 30 what they need and they're no longer scrambling around trying to think you know do i need to make a massive pension contribution to get my tax down because some people don't want to do that some people want the money for themselves or at least access to it if they need it and in a company even though you've only paid yourself 30 grand it's still there you can still take more out you can generate a return on it inside the limited company as well i stick money into money market funds and the top i put my tax in the tide account that i was telling you to do so i i separate that straight away pay myself a wage like you say don't be feasting famine don't go oh i've had a great month let's rinse it because you'll get a bad month you just go i need four grand a month five grand a month so I pay myself that every month and then at the end of the year if you've got the money in like a savings account that generates a return or whatever it's just ticking away you can make a distribution at that point and what I tend to do is go okay I'm going to take 50 % of whatever's left in the business out for me to go and what what you can do at that point is like pay for your holidays for the year and you know these events that you want to get boxed off in April or whatever you know I'll book all my holidays I'll pay my car insurance whatever um and then the other 50 that's like reinvestment into the business growth the business or long-term savings of i invest it in the stock market because i'm building like a pot of money in the business that you know in 20 30 years i can draw down on so that was one of the many benefits you need to smooth the expenditure not have this kind of lumpiness because you will come a cropper at some point especially in a new business i'm five years of what i've been doing three four years of that have limited, I know the seasonality of what I do.

20:42I know that January tends to be a better month than August. Your first year, you have no idea. So you can't think that just because you've had a good month that it will always be like that. There will be some sort of seasonality to what you do. There's that psychology to it as well. I think if you're a sole trader and you've already paid the tax on it, I would argue you're probably more likely to just go and spend it because you're like, I'll pay tax on it now. Might as well just go and spend it. So you might, you know, be subject to that lifestyle inflation by virtue of the fact that I've paid the tax already.

21:14Whereas if it's in the company, there's kind of that like executive decision to withdraw it. And, you know, it kind of more, I think it forces you a bit more to look at your total income and structure it in a more intentional way. I just really encourage people to do that and to make the allocations there and then, because the temptation with a limited company can be like, manana, manana with the tax. And then it comes around, you're like, oh my God, I need to find 20, 30, 40, 50K. And I've got to pay it in a month. I look at some of the celebrity cases that I've seen recently. Ant Middleton claims to be an amazing businessman, but has been struck off as a director because he rinsed all the money out of his businesses and didn't pay his tax.

21:57It's interesting. Joey Essex, I think owes 700 grand to his business. and what I'm looking at and it's always unpaid directors loan accounts and what I'm looking at with these guys is you've just basically taken every penny out of your business and blown it and not allocated for tax and these kind of things so I think that's the good thing about getting paid is it's all taken care of for you it's a big shift when you've got to make the allocation and there's always a reason where you're like oh I'll save a bit extra next month and it just never comes but i think as a sole trader like you said like the barrier to entry of having it in your company for me the most dangerous place for me to have money is in my bank account like it just won't last i've got to either invest it or like pay pay for some stuff like i paid my conscience for the year this till i was like okay i saved like 200 quid let me just do that while i've got the money otherwise i'm gonna end up just buying stuff on amazon and like going out for dinner and just next thing i've run one like a grand which i could spend on my current insurance so i think the idea i like about the limited company is being able to have like a the degree of separation because Because it is the business's money.

23:00It's not your money. Exactly. There you go. And then a lot of the banks that you have, like the NEO kind of bank accounts, they allow you to do automations and stuff. So whenever money comes in, VAT amount is taken off and put to one side. The amount is taken off a corporation tax, my pension. So actually, I do that kind of segregation straight away. I need to implement that, actually. That's not a bad idea. Yeah. I've got a little savings point. Every time I do a transaction, like 20 pounds goes into a savings point, but I need like one for tax, one for, but everyone's finances are so complicated.

23:32This is why you need to talk to someone like Tom and I'm going to offer him a free consultation if you guys want to call him up. You're offering out his time for free. I'm offering out his time, mate. He's a friend of the podcast. I'm just going to start doing it for all our guests. Just say if you want to call him for free, I'll leave the details. I'll leave his details in there. T is subsidising it. Is he? He means subsidising it. Don't worry about that. Yeah, Torsten Bauer, if you want to get in touch with him, I'll leave his details. Well, that's very generous of you, mate. You might get inundated there with people asking you for free calls.

24:01First few hundred a day. If he gets thousands, I don't know, we might have to put a caveat in there. But yeah, it'll be cool. Very, very helpful. Because everyone's very different. Everyone's got different structures, different goals. You found it useful. I found it life-changing. Life-changing. Honestly, life-changing. And like you mentioned about your partner, like my partner, she's always like, oh, what's going on with the money? And I said, okay, next meeting, come with Tom and then you can talk to him about becoming a director and all these things. Tell him how good I'm doing. Tell her how good I'm doing.

24:26Tell her it's all okay. Until I didn't lose all equipment. Until I didn't lose it. So yeah, I think it just gives you a lot more clarity then you can kind of know where you're going. And you've set up a limited company now or you're in the process? No, we're in the process. You're in the process. I just gave him my last year's tax accounts and he gave him this year's tax accounts and then we're going to set up the company. Companies. What are you calling it? That's a good point. Yeah, you need to think about the... Down to a T. Like my Instagram, T is making money. Follow my Instagram. T Unlimited.

24:52T Unlimited. That's why you're my boy. That's why I get the big bucks, mate. the thing is though if you did call it T Unlimited you have to put limited at the end so it would be T Unlimited no he just puts T Un T Un T Unlimited yeah T Unlimited you can't put T Unlimited limited well why why why it's like that T Unlimited yeah you're just T Un or ton T Unlimited yeah how much is it going to cost to get you here ton that's awesome yeah company name picking the company is kind of some of the fun as well isn't it yeah yeah yeah and why two? Sorry, I'm just interested. Why two? I mean, we're trying to keep it relatable for the audience, but basically because I have income.

25:34A ton of money. I have income in crypto and I have income in pounds. You get paid in crypto? Yeah. USDT. Whoa. Ruth literally was like, let's keep it. What in the tax haven is going on here, mate? Yeah, different incomes. One for crypto income and then one for, and I can also do my crypto investments through that limited company and that one for fiat income I can do. To be fair, I have five limited companies. Five or six. You're looking happy to go at me for two, you've got five. Big dog. I reckon once you've got one, you just start like, it's like, it's like a tattoo. You get one tattoo, you get another one.

26:14You get one limited company, next thing you've got five. Yeah, so I have the YouTube channel, the original, and then I have interest in the podcast and in the newsletter, which are technically separate limit companies. And I've got co-founders. Will is like one. So he owns a slice of the podcast because he remortgages his house to help us buy it. Good luck. I then have like a group structure. So this is like, it's called Good Influence Holdings. So it's a holding company that owns my shares in those different businesses. And then I have an investment company that like I can put the profits from them into the investment company.

26:51Because when I'm talking about the long-term savings, if you save inside of a limited company but over time the investments become a bigger part of the business because i don't i don't sit with loads of cash in my business for operations run quite a lean operation if i was to invest inside of my youtube channel over time hmrc could say that's not a business anymore it's like an investment company so i have a separate one and all i'm really doing is building up like my pension inside of that company so yeah yeah you You can set up like a separate company for like property investments as well. And something because my dad's a plumber and by virtue of that, he knows a lot of tradesmen, you know, pastorers and builders and things.

27:36And for whatever reason, I'm not sure why, a lot of tradesmen have rental properties. Because they can do the labour for free. Probably is that actually, yeah. Because they save a load of money. And the unfortunate thing is that they're all sole traders and they all own these houses in their personal name. So it creates a bit of an issue, especially because my dad's 61 now and they're all kind of slowing down or retiring. And then they're going to hit this horrific situation when the state pension kicks in. because they've got this rental income coming in personally, which takes up a bit of their personal allowance, that$12 ,570.

28:19And as soon as the state pension comes in, all that's essentially going to be taxed at 20%. Whereas if they held that property in a limited company, they could let that rent build up in the company, take the state pension tax-free, and just take dividends from the property company as and when they need it. So it's a shame really because it's not very easy to move a property out of your capital gains and stamp duty as well they also can't offset the mortgage interest which i think is kind of people are people hate landlords and they're like oh boo who landlord but it's like one of the only costs of business in the world where you can't offset it so if you've got it whereas if you've got it in a limited company you can the interest that you pay on the mortgage is classified as a cost of the business yeah i think it swings doesn't it i think there was a period in time where it was more efficient to be in your personal name than in a company but the tax changes have definitely pushed it the other way and like the problem with that is obviously you talk about trades people but there's a lot of people that are just they own they moved in with their partner and they kept one flat um and they bought a house together they're like accidental landlords they call them and they're just getting hammered uh by the tax treatment and And I think it's a bit unfair, but yeah, anyway.

29:37Stuart wants to ask something. Go on, Stuart. Stuart says, what counts as permissible expenses? For example, I travel a lot with work. Me too. Would the annual fee for an Amex Platinum card be permissible for the extensive global lounge access? I mean, I'm guessing, Stuart, that that's a no, mate. I'm not on a financial advisor, but I would definitely say probably not. He's like, can I get the platinum Amex lounge access? Cheeky. My kind of go though. I got a ladder the other day as a permissible expense. 10 rung, three meter high ladder. 10 rung, three meter high. Anything you put on, if I use it in the content, it's basically, it's an expense.

30:15And it was for that. And I'm not ever going to use it again. I don't know what I'm going to do with this bloody massive ladder. But yeah, someone commented back going, you're just basically running your DIY through the channel by going, look at this hammer. Look at this ladder. so we're assuming that is he getting the amex is he getting the amex platinum card for extensive annual fee for amex platinum card for permissible extensive extensive he's trying to sell it he's put extensive in there no well it depends how good your accountant is no i'm joking so what you're saying is there's a possibility there's a chance I think a good rule to have with expenses is if you're sat at home, you know, typing up your expenses and you're laughing to yourself about an expense you're putting through, it's probably not right.

31:08It's the rule wholly and exclusively for the business. Yeah. People are like Rolexes and they're like, it's a business expense. You can't put Rolex for business. Yeah, my friend's buying designer watches saying I need it for work because I see clients. I'm like, I'm pretty sure you can't submit that in your... He's like, no, no, because I need to look good when I see my clients. Call him out, report him. Have you seen this thing where they're saying that if you get a percentage of the claim back? If you snitch on someone. Yeah, like London's going to get well, mate. You're going to be shutting all your mates to HMRC for the shady activities.

31:36The calisthenic park's just going to clear out, mate. Yo, buy, buy, buy, protect, mate. You'll be like, I get 10 % of that. Yeah, open another company for the income from that as well, mate. Yeah, from your dog claims. I've seen some crazy stuff trying to be put through you know I've seen one person try and put through a Disneyland trip for the staff team bonding team bonding I've seen that should be I mean if it's your annual kind of if it's your annual team bonding experience and they just go and the staff and my kids the staff and my kids and my wife but then I've seen someone try and put through Balenciaga shoes I remember you know Graham Stephan in the States.

32:21He, it must be a bit more lax in the States. I don't know if you'd be able to do this here, but essentially he bought a Ford GT, you know, the supercar and it's in the back of shot on his YouTube videos and he's just written the whole thing off. anything they put on camera they can basically claim. They are a much looser but they're more pro kind of business in that sense, aren't they? I know like, that's why they all shoot in their cars. They'll go on holiday and just take a selfie, you know, and it's like, oh, it's business expense now because it's content. Because if you're an Instagrammer and you're on the beach, you're like, yep.

32:53It doesn't take a page like that. But I don't know. I tend to be a little bit more cautious than that. Like equipment and stuff is so dependent on what you do. I can expense cameras all day long. Probably can't expense, you know, a suit. I don't think anyone can expense a suit, can they? Can't expense a suit, sure. No, because you can use it in your personal life. Yeah, but you need it for what if... Yeah, but it doesn't matter. You get that benefit. You get that personal benefit. Yeah. But then it's like, how silly do you get with it? Do you count how many times you've worn it to a nice dinner?

33:28But you know, the fashion influencers, I probably argue they do. They can expense it, but that's their job, right? They've got to buy all those clothes. Yeah. Whereas if you're just like, oh, I need a suit for a meeting, they'll be like, no chance. But your car, you can expense some of it, right? Mileage. Yeah. There's a few ways to do it. You don't use your car just for work, but you use it for fun, but you can still expense it. You could get an electric car through the business is pretty effective get a push take on don't get me started on electric cars i ran out of petrol the other day in hammersmith went to the petrol station the whole who runs out of petrol mate busy people it wasn't fully it was it was it was on an emergency it was literally about to stop you put up to the petrol station i made it and then every single pump was electric and i was like what is going on here they've knocked down a normal petrol station and put it all electric.

34:15I was fuming, mate. I've got this mental image of like T's little feet. Yeah, he does. He flinched it, mate. We used to have to get out of the car and push it in Durham. Yeah, you've been there. It's a ride of passage being my friend. You've got to push the car at some point, mate. You've got to push your weight. You don't just get free rides. Most cars these days, it makes it really difficult for you to not notice it. Like in mine, if I'm below like 25 miles, it'll take up the full screen. So I can't use my car play or anything. It's like you need to fill up and we're not allowing you to look at your maps until you fill up.

34:45Honestly, to me, and you'll get in his car and he's driving and it'll just be going, beep, beep, beep. I'm like, put your seatbelt on, mate. And he's just like, oh, I didn't even hear it. I'm a busy man. Stace, is this your friend, Stace? Stace 3000, no, mine's Stace 2000, mate. Stace 3000 says, how can I withdraw money from my limited company as tax efficiently as possible to avoid higher rate fiscal drag? I suppose, higher rates in taxes. It just means how to avoid the higher rate. I guess the fiscal drag point is that more people are getting dragged into that higher rate. But the question is, how do I avoid the higher rate?

35:24Yeah. Limited company is dead easy. So typically what you'll do is you'll give yourself a director's salary, which encompasses like the personal allowance, which is$12 ,570. And the difference after that is because you could take, you know, another 40 grand in earned income, but that's going to be taxed at 20 % as earned income and what most people do is they'll take it as a dividend which is only taxed at 8.75 % and the way to do that you'll pay for easy figures you just pay a thousand pounds a month to yourself as a salary and then three thousand pounds as a dividend and that will take you basically up to the 50 grand level takes up to about 48 grand a year but I would always sort of say to people you know because some people are like oh why don't go straight to the 50 ,270 that you know on the dot well it's like especially nowadays a lot of people have cash interest to factor in and stuff like that so you could have the situation where you think you're being really clever and giving yourself the full 50 grand and then you're thinking oh that chase saver that I was boasting to my friends about being four and a half percent it's just screwed me and I've lost half my uh personal you know savings personal allowance so I'd always sort of say under egg it a little bit because in addition to cash interest if you've got the situation with limited companies where if you you know we spoke about expenses before if you put through a personal expense what your accountant will do is they'll put it to the director's loan and they'll have to vote a dividend for that which will increase your dividends possibly over that 50 grand level so again if you think you're being clever and doing that 50 ,270 and you put through something personal and the accountant's got sort of scrambled around thinking I can't really put this through, I'm going to get in trouble, I'm going to have to put it to the DLA, director's loan account, and suddenly you're over that 50 grand level.

37:18So I'd always sort of underage it a little bit. Okay, T, talk to me about your attitudes towards risk. I mean, I like a bit of risk in my investments, but I definitely would say since the podcast I've toned it down a little bit, not quite as gung-ho and carefree as I was in risk. Yeah, shooting from the hip all the time, weren't you? Yeah. I think personally that you should take risks, but it should always be in areas where you have a unique skill set, an edge, expertise, like your job, things like this. One area that I wouldn't take any risks is compliance. Yeah, the risk changes you grow in business, and you need to be on top of it, which is why we partner with Vanta.