tax

[lisaowens]

jst wonderd how much i should put away each week for tak is it a % of my takings then the rest is mine ? jst a rough idea untill i get appoitment with accountat
thankyou
and also what ever u earn do u out in bank acc then take what u want for wages ? ie.draw it back out

 

[oey]

It all depends on how much money you are taking each week Lisa.

It is not as simple as a % of your takings as it can also depend on what your business outgoings are, how much you have paid out to set up the business and what your personal tax allowance is etc.

A more detailed look at your incomings and outgoings is needed before any professional and proper advice can be given.

 

[Terese]

I agree, abit of a minefield, like Theresa said its not as easy as to take a cut. Tax man works backwards....everyone else works forward

 

[Bagpuss]

I do all mine on-line and they work it out for me...i put in everything i earn...everything i paid out and then it works out how much tax i have to pay. It may look daunting but it really is very easy to do it on-line. x

 

[hippy-chick]

I have a standing order that pays £75 into a mini ISA every month.
this will cover my tax bill at the end of the year.
I have recently started paying myself £100 a week and the rest stays in my bank account for any outgoings.
Remember, everything you pay out for your business is tax deductable, so although you may take £200 in a week, you may pay out £70. You have your NI to pay and keep some back for tax.
If its your first year, you will probably get a tax rebate anyway, but do start squirreling money away just in case.

I strongly suggest that when you register to be self-employed, as someone to come out to talk to you its free. They will give you a quick reckoner to use, ie earn £100 a week, keep back XXX amount of money for tax.

I did my own tax return for 3 years, and this year have paid an accountant to file it for me. I filled every incoming and outgoing on excel sheets
on the computer and handed them in with all my receipts. I also work for a few colleges who PAYE, so also had to hand in P60's.

You are also allowed to earn nearly £5000 before you can taxed as well.

 

[leah82]

I do all mine on-line and they work it out for me...i put in everything i earn...everything i paid out and then it works out how much tax i have to pay. It may look daunting but it really is very easy to do it on-line. x

Hey where on-line do you get it all done?

 

[dee]

i do mine on line too , just go to the hmrc website (i think) then register to do it online , they send you a password through the post , it seems so much easier than doing it on paper , whe i do mine it usually only takes abut half an hour , with the paper one it used to really confuse me and take me hours , lol

 

[Lucy-Jayne]

If you need figures just to cover yourself until you sit down with an accountant I would put by 20-22% of your takings (It's not going to be any more than this until you start earning around and over £40k per annum. (I'm actually an Accountant by day!)

Everyone else states very valid points, and yes amounts and percentages do vary depending on income / expenses, but that figure should take into account tax and NI in the short term.

L-J

 

[fats28]

I agree with the above 20-22% will cover you for tax & NI, I don't know of anyone I have set up self employed who have come unstuck sticking to this amount.

 

[bombini]

I haven't put anything away for tax as I knew there was no way id earn enough in my first year to pay anything. I have just completed my tax return for last year and haven't got to pay anything thankfully.

This year I haven't really took a wage either, I am going to (hopefully) start from the end of this month. I have had so many problems with stock and various suppliers I seem to be forever buying stuff.

Have you done a business plan ?

 

[fats28]

Although you probably won't pay tax in your first year, its usually a good idea to try put something approaching the amount away each month. That way you've a bit put by in case you do incur a small tax bill and if you don't you have a nice little shopping bonus!!

 

[gillian w]

Please go on the free start up courses for the self employed offered at a local tax office.They are so helpful and they will cover all this sort of thing with you and you can ask any questions.They also offer another one which is for help filling in your tax return.
Get info on where and when at your local office or ring the national number and they send details.
it helped me no end and gave me a bit more confidence.There is a booklet which shows you figures of how much to put aside for tax on earnings.