Folksy Ltd

A tax query

Hi all,

I’m aware that self-assessment taxes need to be in by the end of January, and so I looked on my account on HMRC, which has the message ‘No tax is due at the moment’.

I work full time, which uses up all of my tax allowance and I’ve worked out that, from the things that I’ve sold, I owe about £41 in tax. I really don’t want to be fined, so do I need to look somewhere else on the HMRC website?

Sorry if this is a really stupid question but I’ve not done this before.

You will need to register as self employed (as well as employed) and fill in a tax return so they know how much to charge you.

I have registered as self employed but I cannot for the life of me see what to fill in where. It’s almost as though they’re trying to fine people.

*Disclaimer - I’m pregnant, so I don’t have my usual brain capacity.

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Hmmm. Maybe I don’t need to do anything this year. It says on the HMRC website:

If you need to send a self assessment, you fill it in after the end of the tax year (5 April) it applies to.

I started selling in September this year, so in my mind I fill in the self assessment for my £41 in April and pay in January next year. Or have I got that entirely wrong?

Yes you do your tax up to the end of the tax year 16 and pay it before Jan17

I do mine in Oct/Nov to get it out of the way before December

Yes, if you started selling in Sept '15, you don’t need to fill in anything for the tax year 14/15 (due Jan 16), but will need to do a self-assessment return for tax year 15/16 (due Jan 17). You can complete it anytime after April, but I usually wait until I have all my tax statements/P60 etc for the tax year - I usually do it in the summer and get it out of the way. The self-assessment returns are fairly straightforward to do online.

You only pay tax on profits, not sales amounts, so don’t forget to keep records of all your business costs and offset those.

Brilliant. Thanks people.

I have been keeping receipts and things, but as I don’t know yet what the format is, I won’t know until I come to fill it out what exactly I do with it.

And hopefully by time you get to April you will owe them rather more than £41 - not because it’s nice to pay tax but because that means you will have made more profit :slight_smile:

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It might be worth printing off the self-assessment notes from the HMRC website beforehand and have a read through. It explains most of the requirements, but you can always check with HMRC if you’re unsure - they do a couple of good free courses too, for newly self-employed people, which are worth going to if you’re able to.

I’ll have a look into that. Thanks. It’s tough, this tax malarkey ;o)

It is tough, Christine, especially if you don’t keep up with it.

You can work out how to do it yourself, but it also might pay you to have a quick (and as inexpensive as you can find) chat with an accountant, who could tell you in an hour what it might take you a year to learn by yourself.

They’ll be able to give you the simplest way of keeping records (outgoings as well as incomings) and anything you can claim against the incomings.

I do all my own ‘book-keeping’ (putting things in order in files), but I send the lot to an accountant for him to fill in the return. It gives me peace of mind that there’s someone verifying my figures and, hopefully, making sure I’m ok with the tax man.

As my accounts aren’t etensive, this doesn’t cost me an arm and a leg and means I can sleep at night!

This is meant to be helpful. If it’s interfering, ignore me!!! I’m sure lots of people will tell you it’s perfectly easy to do it yourself. I just find it best for me this way.

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I do the same thing i.e. my own bookkeeping and then pass it to the accountants at the year end. Then I am 100% sure I’m covered and in order, and to give you an example, they managed to reclaim back tax which I had paid in my ‘proper job’ in the first year that I set up, which resulted in a substantial cheque from the IR. I would never have known that I could do that. For me, I’d rather pay someone else until the time comes when I think I know enough about tax to stop involving the accountant! For the peace of mind, it’s priceless.