A lovely tax question

[kezza*]

Ok, I started out last september and I spoke to an accountant at the time. I have recently had a letter I think saying to get my self assesment in for October or online for January.

But the thing I'm confused about is the accountant said I have a taxfree year and I start paying tax in 2011,,, if I have to do this assesment thingy I'm not going to have to pay tax am I???

Thanks

Kerry

 

[hippy-chick]

you generally pay tax from april the year before to march of the currrent year, ie april 2009 - march 2010 but then have until September 2010 to submit your tax return.

if your takings are over a certain bracket then it gets more complicated and you start having to pay in advance from predications of what you will earn.

 

[jes]

Hi,

You need to complete your tax return for the April 6th 2009 to April 5th 2010 tax year and hand it in by the times suggested by your accountant.

Your first tax payment will be due by the end of January 2011 (this is where the 'no tax to pay for a year' comes from) and it will be 50% of what you owe. The second half of the payment must be made by the end of July 2011.

To make things worse you have to pay, in advance, tax and NI for your 2010 to 2011 year and this is based on your 2009 / 2010 tax return and they keep this on account. Effectively you have to pay double tax and NI for your first year but, of course, subsequent years will be cheaper.

HTH
jes

 

[Zo Zo]

You must complete a tax returrn regardless of whether you have made a profit or not and / or whether you owe any tax. You are obliged to do this and will be fined £100 if you do not. So, if you submit a paper tax return for 09/10, this needs to be done by end of Sept 10, or online by end of Jan 11. If you still haven't done it by July 11, you will be fined £100 again.

What I understand is slightly different from Ann and Jes, I'm not saying I'm right, I'll just tell you what I believe to be correct because it is a slightly worse scenario...

I believe you have to pay 100% of your 09/10 tax by the end of Jan 11 and then by the end of July 11 you need to pay 50% again which is basically an upfront payment towards your 10/11 tax return.

 

[WaxGirl]

Rather than paying an accountant why not do it yourself? It's not that complicated and there is loads of help available and infor on how to complete it , plus it gives you a really good understanding of the finances of your business.

 

[bridget1802]

Rather than paying an accountant why not do it yourself? It's not that complicated and there is loads of help available and infor on how to complete it , plus it gives you a really good understanding of the finances of your business.

I started out properly in June 2009 and I am going to attempt to do my tax return myself sites like money saving expert forum seem to have loads of good advice on them, I only do it part time and with all the things I have paid out for Ive not made a profit last year

I am wondering if I will get a tax rebate from my full time job - bonus if I do can start my masters in nails

Vicky x

 

[hippy-chick]

I don't earn enough to have to pay in advance, I still submit my paperwork to my accountant to fill in my tax return and I pay NI by direct debit on a monthly basis, I have a standing order that pays into a specific account every month to cover any tax bill that their might be.

Until my accountant advises me otherwise I always submit my excel sheets and receipts to him in June so that I am way ahead of the deadline.

 

[WaxGirl]

yes that could happen if you made a loss in that year and that will be offset against tax you paid in your other job, if there is tax to be paid back you can have it paid back to you or offsett against future years.


i went to a seminar ran by the the HM Revenue and Customs and that was so helpful then just used their booklets to guide me through.

I tried to use the online process but found there were some technical errors with it that the revenue couldnt solve so ended up doing it onb paper and this year will do it on paper as well.

 

[kezza*]

I had an accountant as thought it would be a hell of a lot easier than doing it myself and it may safe me money but it's classed as an expense so better someone else get's it that the tax man.

I was under the understanding that the first year is tax free but it's not if I'm paying for tax september09 to April10, it's just you pay in Jan11 for that year?????

I'm really crap with reciepts, I start off good and then think I have to many and don't bother keeping them. Or I buy one item and don't bother with the reciept.

Thank you

 

[jes]

I was under the understanding that the first year is tax free but it's not if I'm paying for tax september09 to April10, it's just you pay in Jan11 for that year?????

Hiya, yep thats right. I know everybody says it, but there's no such thing as 'first year tax free'. You pay your tax and NI, for your first year, but roughly one year later.

HTH
jes

 

[kezza*]

Hiya, yep thats right. I know everybody says it, but there's no such thing as 'first year tax free'. You pay your tax and NI, for your first year, but roughly one year later.

HTH
jes

I know it's not rocket science but if it was explained that way then I wouldn't have been so confused lol.

cheers
Kerry

 

[kimi1101]

hun you really shouldnt be throwing away receipts!

Keep everything, if you throw them out it means you possibly wont be able to claim tax back on whatever the receipt was for. xxx

 

[Zo Zo]

You must keep every receipt. All those single little items can really add up. I would recommend you go on Amazon and get yourself a yellow accounts book and fill it in every week. Not every column, just your income and outgoings will be fine, and record your mileage. It will also be much easier for your accountant, and less expensive, if you present your records nicely. If you give him a shoe box full of receipts your bill will be bigger!

 

[Lil lisa]

I would say its always advisable to use an accountant. Not only are the fees you pay them tax deductable but they know exactly what they are doing. It's not actually as straight forward as people seem to think and I actually know of a therapist that was fined £3000 because they had spent 5 years miscalculating their tax!