Originally Posted by Designr
I think you are getting VAT and Tax a little mixed up. If your company turns over £56,000, then you must start to charge VAT on your produts/ services.
For tax, if your profits are over £4,500 (not quite the offical figure, but its there are there abouts!) then you will be charged Tax.
It's something like that anyway. Best to get proper advise for your local Tax office.
You are correct but only to a certain degree. If hosting is your only income then your tax code will specify your tax-free allowance.
(EG: A tax code of 474L is £4740. Just take the numbers and multiply by ten)
You do not have to pay tax on your tax-free income each year.
If hosting is not your only income, you will have to pay income tax on the very first GBP (£) you earn because your main income will be eligible for your tax allowance (especially if your company uses PAYE). To stay legal, you will need to apply for a tax return and itemise your entire years income including all the details from your P60 from your main employment.
VAT is a different matter. Currently if your income is below £56,000 you do not need to register for VAT but you can if you wish. Registering for VAT is very useful if you are setting up business and / or your main customers are businesses. Everything you purchase for your business may be eligible for a VAT refund but your clients will be charged VAT on their prices. This will not factor much if your clients are VAT registered companies as they will be able to reclaim this.