Any good guides on paying tax?

[down2earth]

Hi all, I'm newly self employed and was wondering if anyone knows of any good laymans guides on the kinds of things that can be claimed for when filling out the self assessment forms. Having waded through the HMRC website I have a reasonable idea but real life examples are always useful.

I will also be doing some sub-contracting work for a local sparky so not sure if this changes anything. I've already started recording everything I buy, right down to earth sleeving (£2.08) which I assume everyone else does.

Thanks for any replies.

Russ

 

[Electro-tech]

I think if you work self employed for 3 days a week continuous for the same company,technically in the eyes of the Tax sharks you should be PAYE. Maybe bill monthly as seperate contracts.

 

[down2earth]

I think if you work self employed for 3 days a week continuous for the same company,technically in the eyes of the Tax sharks you should be PAYE. Maybe bill monthly as seperate contracts.

I will only be doing 1 or 2 days a week at most but thanks for the reply

 

[electromonkey]

Anything that you can justify that you use for work can be written off. Asides from the obvious, things like your laptop, a percentage of your gas, electric and phone bills (if you do you admin at home). You mobile phone contract.

If you have anything that you use for work that you have bought 5 years prior to going self employed, you can claim for that too. You'll need to have kept your receipt though.

A good rule of thumb that wont leave you finding a massive tax bill at the end of the year is to put to one side a third of your profit after the first £500 you have earned every month.

Hope that's of use.

 

[electromonkey]

Does the spark you are subbing for pay your tax on your earnings from him/her?

 

[Amp David]

Didn't even bother trying to wade through all the HMRC mumbo jumbo when i started. Too much time wasted, got an accountant to do it, this can also be put through the books!

 

[Guest123]

Dont forget about the allowance for washing your clothes.....it's not much but anything back off em is a result!!!

 

[fredrico]

As amp dave said, get an accountant, they will sort through all the paper work for you, they are not as expensive as you think, and will save you time and worry.

 

[Octopus]

The tax threshold is now £7495 so that's about £625 per month tax free, NI of 8% is paid once you've made over £5800 so that's about £485 per month NI free.

About £300 per year will buy you an accountant to get your return sorted and all your allowances claimed.

I work on the basis that I'll get £1000 per month tax free, then put 30% of the rest I make into Premium Bonds so its tucked away and saved, plus you might win a prize too!

 

[Des 56]

It used to be,but not completely sure now ,work had three criteria that could be used to describe you as either employed or self employed
You tendered for the work,you supplied your own plant,the third I have forgotten :dead:
They will sometimes look into your status if you do regular sub contract work,they want the employers insurance money

You may forget about some jobs that have been paid by cash,its a terrible mental affliction and affects lots of self employed sparks,try to get that mental problem sorted out one day

Keep record of all stationary and administrative tools,that includes computers and printers
Working clothes and laundrey fees on a regular basis
Travel and vehicle maintenace and purchase costs
Tools,goods that you purchase
Technical books,training costs,registration fees,casual labour occasionally
The list grows as I'm typing,I'm sure there will,after me, be more informative posts

The main advise I will give and this is applicable to myself to an unbelievable extent
Keep on top of the books on at least a weekly basis if not on a daily basis
Getting into all sorts of flaps, because the years end is nigh,that is me,it is to be avoided at all costs

 

[Octopus]

It used to be,but not completely sure now ,work had three criteria that could be used to describe you as either employed or self employed
You tendered for the work,you supplied your own plant,the third I have forgotten :dead:
They will sometimes look into your status if you do regular sub contract work,they want the employers insurance money

You may forget about some jobs that have been paid by cash,its a terrible mental affliction and affects lots of self employed sparks,try to get that mental problem sorted out one day

Keep record of all stationary and administrative tools,that includes computers and printers
Working clothes and laundrey fees on a regular basis
Travel and vehicle maintenace and purchase costs
Tools,goods that you purchase
Technical books,training costs,registration fees,casual labour occasionally
The list grows as I'm typing,I'm sure there will,after me, be more informative posts

The main advise I will give and this is applicable to myself to an unbelievable extent
Keep on top of the books on at least a weekly basis if not on a daily basis
Getting into all sorts of flaps, because the years end is nigh,that is me,it is to be avoided at all costs

I couldn't agree more about the last sentence. Investment into software to run your accounts etc may appear to be a luxury, but come year end it'll do all your reportsfor your accountant (or yourself) plus all the benefits of having your database, estimates, invoices, job profitablity, etc all available to you.

 

[pblec]

my opinion as i was in your situation a few years ago.

HMRC do free courses (i did mine in Peterborough) for this. 1st is becoming self employed, i didn't learn anything it just confirmed all the research i had done and as it was a tax bloke telling me i beleived him

2nd course online form filling do this just before your tax return is due as then it will be fresh in your mind

3rd cours CIS (i'd do this 2nd if i was you its just i did it 3rd) try to avoid registering as a contactor you need registering as a sub contractor as i registered as a contractor and have only ever made 1 payment of £25 in 3 years but have spent time arguing myself out of an £100 fine.

yes some of you guys are way bigger firms than me so for me doing my accounts on sage and submiting my own return is a doddle no need for an accountant as for what can you claim back yes all you have to do is justify it i claim £1200 for an office, its a box bedroom only used for work so 1/4 of all household bills i can claim back my mortgage is in its first couple of years so is interest which means i can claim 1/4 of that plus elecy and insurance, which is more than the £1.2k.

work clothes the tax bloke told me should only be the printing costs, but now they're not only work clothes but H & S requirements (so you've justified it). i asked if i could buy an M3 just for quoting but he wouldn't answer. there are capital allowances but for most of us starting out these arent an issue with the figures involved.

 

[IQ Electrical]

Hi all, I'm newly self employed and was wondering if anyone knows of any good laymans guides on the kinds of things that can be claimed for when filling out the self assessment forms. Having waded through the HMRC website I have a reasonable idea but real life examples are always useful.

I will also be doing some sub-contracting work for a local sparky so not sure if this changes anything. I've already started recording everything I buy, right down to earth sleeving (£2.08) which I assume everyone else does.

Thanks for any replies.

Russ

I'm firmly in the 'horses for courses' camp-if you've got a decent turnover, get a decent accountant, why waste your own valuable time when you could be earning as much as your accountant doing something that you understand?

A good accountant is literally worth his/her weight, they don't miss a trick, I would have to spend hours reading books on personal and corporation taxation which would be a complete waste of my time when I could be out winning work and drinking Costa espresso!

 

[Gravid]

I've recently had a meeting with a business specialist at my bank, was really helpfull and only took an hour on a saturday morning. He told me loads of usefull things and answered alot of questions i had about being in business and what i could claim for. Accountants will only tell you so much. They don't want to be held responsible for you taking the p.
We had a laugh about a fella he told me about who was putting his gym membership in saying it was executive stress relief !! Before this i didn't even realise i could claim a percentage of my electricity bill etc
Well worth asking your bank about this.

 

[down2earth]

Thanks for all the really useful replies chaps, especially the bit about being able to claim for equipment bought before you became self employed, I have a Megger that fits into this category. The key seems to be claim for anything that can be associated with the business but don't go too mad so you attract their attention.

If time allows I might start a list of stuff for other newbies like me.

Russ

 

[telectrix]

a couple of tips.

1. don't bother saving all fuel, and vehicle receipts. you claim 40/mile against tax. note you mileage at start and end of year.

2. your wife/girlfriend/boyfriend is employed by you to do the paperwork and answer the phone when you're out. wages just below the threshold for tax& NI.

 

[IQ Electrical]

Thanks for all the really useful replies chaps, especially the bit about being able to claim for equipment bought before you became self employed, I have a Megger that fits into this category. The key seems to be claim for anything that can be associated with the business but don't go too mad so you attract their attention.

If time allows I might start a list of stuff for other newbies like me.

Russ

Take a look at this site: Business support, information and advice | Business Link

It really is a bible for anyone starting up or considering starting up a business, some excellent information on taxation.

 

[Geoffsd]

A good accountant is literally worth his/her weight,

GOOD being the operative word. I had one once who I think was working undercover for HMCR.

 

[pblec]

40p per mile is now 45p per mile i know it was just an example of what you can do.

i am not being picky or anything i am purely pointing that out just incase you was using 40p per mile as part of your pricing policy and could now justify a little increase. (last budget)

 

[Geordie Spark]

Dont forget about the allowance for washing your clothes.....it's not much but anything back off em is a result!!!

.......... and the carpet & furniture & the cleaning of the "spare" bedroom that you use as your office.

Every little helps - as the old lady said when she piddled in the sea.