I'm self employed, and may be about to take on an open-ended contract working for a separate company. They would pay me as a contractor, and I would then pay taxes on that (self-assessment) at the end of the year.
However, it is my intention to use this money to buy equipment towards my current self employment activities.
The contact work and my own activities are in the same area, but are not directly related.
(i) Do I have to pay income tax on the money earned from the contract work, then buy equipment for my other self employment activities.
(ii) Can I class the whole thing as one business and buy equipment with the pre-taxed contract money, and claim the equipment as expenses, before paying tax?
(iii) there's no real difference as I'd end up paying tax on the money either way.
Just wondering which way is most tax efficient, if at all. The above are my thoughts, and having written this down I'm inclinded to think (iii) is the answer.
Sorry if this sounds a bit basic or silly as I'm just starting out.