Tax - Self assessment on line - anyone for a group hug?

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fishwife
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Postby fishwife » Mon Jan 28, 2008 3:23 pm

I usually find there is more money in the pot before Christmas than after - and they can be very unpleasant if you don't pay up at the right time! Jan/Feb can be quite lean! (and when we can manage a short break before getting into making stock etc for March) I'd hate to face a tax bill now!!


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Postby Shadowcat » Mon Jan 28, 2008 4:17 pm

Oh, I pay for Christmas through the year, and usually have a commission shortly before Christmas, so that money is put in the tax man's pot - don't know why it works like that, but it does for me. Have never failed to have the money to pay on time! (Sorry, not meant to sound goody goody!)

For me Jan and Feb have also usually been good months, as the season for the groups I work with tends to slow down over the summer, and speed up autumn, winter and spring. (Enabled me to have school holidays off when my son was at that age - yay - I still tend to work that way!)

S.



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Postby Annie the Pedlar » Tue Jan 29, 2008 10:24 am

Do the tax men let you pay monthly installments of tax owed?

Isn't there a way that involves guessing how much money you are going to make in the year to come and you pay in advance (not my idea of fun!).
Has anyone got their head round this part of the red tape?

Annie getting the collywobbles as her profits are looking quite healthy for this year in an I'm sewing past midnight every day and think I've achieved the minimum wage sort of way.



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Postby gregory23b » Tue Jan 29, 2008 11:18 am

I pay the lovely Marlene to do my books, she claims and questions my stuff, well worth the £250 or so a year (tax deductible), for peace of mind and ad hoc advice.

Annie, in theory after your first year's trading you should be paying the tax from that tax year and the same again - up front for the following year, so if you paid say 2k in tax for year 2006-07 then your bill would be a total of 4k. Lots of people get caught out like that, my mate Al got stung for 8k. You can appeal, if you expect your next year's profits to be less, that is more difficult to do at the beginign of the end of tax year as you wont know.

I did my books for the summer latst year to sort out some Family tax credit stuff so am for once ahead of the game, I was billed for the same amount of tax again but have appealed because I have changed the nature of my business - ie transferred the core of it to a company leaving the historical stuff as the self employed work, that means my t/o is way lower so fingers crossed wont be billed for profits I wont make (nearly end of my trading year so I already know how litte I have turned over).

Acocuntants are worth their money, not for the adding up, but the advice and explanations of the ever-changing tax rules.


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Annie the Pedlar
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Postby Annie the Pedlar » Tue Jan 29, 2008 12:56 pm

I queried the paying in installments in case it helped anyone else.

Personally, I became Annie the Pedlar because I can shoe horn work in with being knocked out by migraines and bugs and injuries, family commitments - my mum is getting very frail and although my son's are 6 feet tall they still call up and ask "Muuuuuuuuuuum......can you just....."-
so although I work past midnight on my good days I do take chunks of the year out. I'm really working part time and there was only one year where I earned enough to pay tax. I had the money in my bank account so it was OK.
I do my books on the computer so the program gives me a running total. It gives me a warning of what I might be asked to pay so I would be an idiot if I didn't put the money aside.

Is there a figure that triggers off The Taxman asking you to pay in advance?



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Postby gregory23b » Tue Jan 29, 2008 1:26 pm

Not that I am aware of, it is merely the same amount of tax on profits, they assume you will do as well the next year, great eh? I can check with my accountant, but I know she is v. busy with the last few days of tax returns.


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DONE AND PAID!!!

Postby Shadowcat » Tue Jan 29, 2008 1:36 pm

:D Done, with a great deal of head scratching, paper rustling, puzzling over obscure and complicated wording on a document, using of calculators (I'm useless with them, so paper and pencil are used as back-up) but it's all done, filled in, sent off, paid, and I have the receipt in my files!

WARNING :!:

There may be a strike on the last day of January, by rRevenue staff - article in the paper some weeks ago, so anybody planning to do it on Thusday should try for Wednesday instead (she says virtuously!)

S.



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Postby Skevmeister » Tue Jan 29, 2008 1:55 pm

Can Is Second G23 in get a good accountant, the money they cost you is saved in time you spend doing your joba dn not worrying about all the tax. They should save you alot of money and if yours is anything like mine nearly pays for themselves.

ALixx


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Shadowcat
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Postby Shadowcat » Tue Jan 29, 2008 2:17 pm

An accountant nearly landed my DH and me in prison for non-payment of taxes! He had filled in papers without checking with me, and the IRS said I should have paid for working on a certain date in September 1977. I was able to prove that I was not actaully working in a job, although I was labouring - I produced my son's birth certificate. :lol:

Since then I have gone to a tax tribunal on behalf of my DH - same accountant (later jailed for fraud), and done my own tax ever since. I would be paying more to an accountant than I pay in tax, but then I run a very small business, with a small turnover. It's well worth using one if you would pay them less than you would pay in tax, but not otherwise, imho.

S.



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Postby Merlon. » Tue Jan 29, 2008 2:18 pm

There is no strike on 31st January it was called off a couple of weeks ago.
Payments in advance are not required if:-
if your tax bill for the previous year was less than £500
or more than 80% of you income for the previous year was paid by deduction at souce, eg under PAYE.
if the bill is predominantly for Capital Gain Tax.

I worked for HMRC for over twenty years until I was TUPE'd out, we advised taxpayers to get it done earlier and not wait till the last minute. The fee to an accountant will almost always be less in the long run than the stress and hassle of leaving it to the last minute.

http://www.hmrc.gov.uk/individuals/tmaself-assessment.shtml



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Postby Shadowcat » Tue Jan 29, 2008 2:41 pm

Merlon. wrote:The fee to an accountant will almost always be less in the long run than the stress and hassle of leaving it to the last minute.

http://www.hmrc.gov.uk/individuals/tmaself-assessment.shtml


Only if you pay more in tax than you would pay to an accountant - honestly - and the online form really isn't that terrifying if you keep records (and remember where you put them!) I would always have paid an accountant more than I would have paid in tax, without exception.

S.



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Postby Skevmeister » Tue Jan 29, 2008 3:43 pm

OK I agree that there are bad accountants but that doesnot engate the fact that most of them are honest and are better equipped to help you with the tax and not just the self assemsnet but alos loads of other savings and ways of saving money when running ypour business.

Alixx


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Postby Shadowcat » Tue Jan 29, 2008 3:54 pm

I agree that not all accountants are bad, but when I set up my one person business I took advice from the very helpful people at my local tax office. They told me what "plant" I could claim for - my machines, sewing equipment, table for working on etc. They explained what I could and could not claim for in terms of wear and tear, what I could not claim for in clothing, worn solely in pursuance of my trade or otherwise, and so on.

Having worked for several years as a freelance in theatre, I already had a good knowledge of what was then allowable against tax, and was able to clarify that too. For example, claiming subscriptions is allowed if they are related to your trade, visiting theatres and other places of entertainment, owning a TV, video/DVD player and so on are all claimable by way of research in my business (costume).

Maybe I was lucky with my local tax office, but I have always found them to be the ultimate help when needed, and when I am feeling particularly dumb over my tax. And best of all, they do not charge a fee.

If you are new to self employement, or have a large turnover, where you have to submit itemised accounts (I don't) then I can see where an accountant might be worth paying for, but I would advise taking great care in selecting one - personal recommendation does not always work - the guy who sh*fted us came highly recommended by several well known actors and directors.

S.



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Postby gregory23b » Tue Jan 29, 2008 4:23 pm

My accountant does the books, I pay the money, via the billpay online.


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Postby Shadowcat » Tue Jan 29, 2008 4:39 pm

gregory23b wrote:My accountant does the books, I pay the money, via the billpay online.


Shouldn't that read "My accountant does the books, I pay the accountant, I pay the money, via the billpay online"?

I do the accounts, I do not pay an accountant, I pay the money, via the billpay online.

Whatever suits.

S.



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gregory23b
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Postby gregory23b » Tue Jan 29, 2008 7:13 pm

I meant I take final responsibility for the payment of the taxes, it is as you say an excercise in trust.

Personally, my maths and patience for accounting leave a lot to be desired, the accountant's fee is well worth it.


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Postby Neibelungen » Tue Jan 29, 2008 8:35 pm

The thing with all accountants and the worth or not of their fee, but the way you present all your invoices and reciepts to them .

Give them a big envelope of scruffy bits of paper, scribbled nots and a the odd bank statement and they are going to send you a bill for a lot more work making sense of it.

Present them with an organized system and all they will need to do is go through and verify what you've god, adjust anything in the wrong place and can easily pull out your data for a tax return.

It comes down to making an effort to actually keep track of your records. Even Annie's simple envelope and box system will work and save you a lot in the fee side because you've started doing half the work for them.

My brother is a management accountant, and refused to do my books for me. His argument was pretty simple

If you don't try to understand how to even run a simple set of books, how can you expect to know how your business is actually doing.

Business Link and local evening colleges run lots of cheap courses to write out simple sets of book-keeping, and your local library will have plenty of books available to read from.

It paya to set a couple of hours aside once a month on a Sunday to write them up. By the end of the year they are already done and you hardly have to do anything when it comes to submitting a return.

If you use an accountant, or are thinking of, it's worth asking him what software he uses. Most of the simple starter packages are about £100 or so, and presenting your records already formatted out will probaly save you that in fees in the first year.

Microsoft do a free download of their Office Accounting 2008 basic version, which while not perfect, is easier than a spreadsheet for the non-technical. Visually friendly though.
Turbo-Cash, Gnu-Cash are both free double entry systems, although not very prety.

Sage, Quickbooks, Tas, MYOB all do started packages about £100 mark or so. There are even a couple of online accounting systems available these days.

All you really need is an A4 wide ring binder and a few plastic pocket sheets and few sticky labels for Months and half of your sorting is done. Petty cash in one pocket, Invoices sent in another and Bills recieved in a third. Bank statements at the back to check off against and find out.
Final page at the back to list up payments made as drawings to yourself
.
90% of the work is done by actually writing up a list of those sections and adding the totals in each month and making them into a year.
Your accountant charges you for checking that it's added up correctly and assigning things into a correct category for the tax man.



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Postby Shadowcat » Tue Jan 29, 2008 8:53 pm

Or you buy one of the clever double entry book keeping books that you can find in Rymans, Smiths' etc, for about £25.00, with all the categories laid out for you, and fill it in every day, keeping the receipts in the book. Once a month you total everything, then at the end of the tax year, whenever you decide that is for you, within the rules of course, you add up all the months, and there you are. As I keep on saying, for a very small business, who needs an accountant? Works for me.



S.



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Postby gregory23b » Wed Jan 30, 2008 10:49 am

Much of my stuff is invoice based so is easy to track and pass on, I rarely buy with cash and don't take cash as payment. The accountant is handed a file of invoices - numbered and dated, invoices to me, again date order, then any receipts for purchases in categories, last year I had about six envelopes with my total on each. The last year will be slimmed down a lot due to the movement of the main business activity.

"The thing with all accountants and the worth or not of their fee, but the way you present all your invoices and reciepts to them ."

indeed and not giving them your books on the 29th January.


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Neibelungen
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Postby Neibelungen » Wed Jan 30, 2008 11:52 am

A simple Ryman's type book may well be easy for most small business to keep track of simple bookkeeping details when it's simply income and expenses . It gives you a basic profit/loss at the end of your tax year.

The problem comes when you start moving into higher levels, especially above the £15,000 turnover mark when you should really submit balance sheets.

a basic adding and subtraction approach works well, but has the dissadvantage that it doesn't have the ability to manage errors in calculation.

Double entry book keeping is designed to cope with that, though even then it can't always deal with correctly entered data, but wrongly allocated.

The other side of a simple book keeping approach is that it doesn't give you any data on what your business is worth. Things such as what your fixed assets are, employment of capital, stock valuation and asset/liabilities figures.

Likewise unless you properly structure your accounts can you determine the difference between fixed and variable costs.

You do one job taking a week and make £300 profit.
You do a number of jobs taking between 4-8 hours making £50 on each
Which one actually makes you you most profit. ?
Which one ties up the most cashflow?
Is it more efficient to pay somebody half your rate to do 70% of the basic work while you concentrate on the remaining 30%

Simple figure booking will give you simple answers and will serve most people to give them the answer for the tax man.
But what it won't tell you is what your really doing with your money

Some things work very well in a hobby/craft world when the demands are fairly simple.
But when you come to 'Am I earning Enough ? ' and the only answer is ' Work Harder' somtimes it can pay to look at things in a more complex way.



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Annie the Pedlar
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Postby Annie the Pedlar » Thu Jan 31, 2008 7:08 pm

:lol: Just heard on the radio that the online fill it in yourself website has crashed. :lol:

I'm assumming we've all not left it to the very last minute.
But worry ye not if you have. You've been given an extra day to get your return in. :lol:

I use a lovely little (computer) accounts package called Quicken.
It can show me what I've spent where in graph and pie chart form. In pretty colours. To me they are pictures. I can do pictures. :P
Boy! Am I spending a lot on travelling! :cry:
And it adds everything up as I go along. :D
Which is why I know I'm going to have to pay a lot of tax next year :(
unless I follow Shadowcat's advice and put some money away towards my pension :idea:



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Postby Jack the dodgy builder » Sun Feb 10, 2008 1:27 am

Now Annie I have one envelope for each week !! numbered 1-52 as well as dated. and normally get everything in by the end of April each year , except for the year that my head end up being screwed on the wrong way around.!!
I do not use an accountant too slow and not cost effective .
I also have a seperate account into which I pay a percentage of all invioces when paid, ready to pay my tax bill ,normally taxes is less so have a holiday fund.
If I earn it I dont mind paying it.



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Postby Nigel » Mon Feb 11, 2008 11:22 am

How do we do things

Used to be chaos

Now we ahve aspike every bill we receive is spiked and once a week entered into the books

This allows us to know where stuff is and to keep an hang of things.

Agee about he balance sheet approach as a lot of value for some businesses can be tied up in stock debt etc etc


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Postby House of De Clifford » Tue Mar 04, 2008 8:17 am

hi peeps,

just catching up with some threads... Filinous - I also used to work for the jobcentre/benefits agency. As you are a mum, and get child benefit, your class 1 NI stamps will be paid in full for you until your child is 16 ( or 19 if going into Further education)

I'm like Sally, I do my accounts at the end of the financial year, 5th April. You have until the following Jan 31st to complete it, but i'm anally retentive and like to get everything done and dusted, i was like that at school too........... a bit of a swot i suppose.

Through the year I have a spreadsheet for my reciepts for each tax category, and enter them in monthly. I also have an incoming spreadsheet.

If anyone wants a blank copy just let me know, it's on Exel.

Miranda


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