Self Employed - Tax Question?

TITEASCRAMP

If you are self employed how many weeks holiday are you allowed to take?
I know you can take as many as u like I suppose but say for the tax return, I said I was earning £100 a week for 48 wks is that okay? or could I say 47 wks?

Also what happens if you are un well and don't work for a few days or a couple of weeks?
What do you write down then? Bearing in mind on tax credit form you are stating that you work every week.
I'm confused I dont understand it at all.
Help please

toby_puppy

Have you got a record of your self employed income received during the year, ie. sales invoices or amounts you paid into the bank from customers/clients?
It is not really an issue if you weren't working during part of the year (unless you need to declare any taxable benefit?) you just need to show how much income you generated from your self employment during the tax year and set off any expenses related to your employment.

toby_puppy

the tax return asks for the accounting period, so assuming yours is 6 april 07 to 5 april 08, that is what you would enter, regardless if you were off sick at any time during that period.

schneckster

For the self-employed section, all figures you enter are based on the tax year (unless you change that in someway by offsetting). It s the annual figure they base tax calculations on, be it your income, your outgoings, and your profits.
Just add up all your earnings into one figure, all your expenses into other annual figures, and bung them all into your return.
And be quick... Jan 31st is looming!

ScotInEngland

jostenning wrote: »

Have you got a record of your self employed income received during the year, ie. sales invoices or amounts you paid into the bank from customers/clients?
It is not really an issue if you weren't working during part of the year (unless you need to declare any taxable benefit?) you just need to show how much income you generated from your self employment during the tax year and set off any expenses related to your employment.

I think what the OP is getting is the 'hours worked per week' question. You have to state how many hours a week you work as there are different rules and allowances for different hours ie. under 16 hours, over 30 hours.

Trouble is as a self employed person it can be difficult to produce an accurate figure, there is no set definition of what counts as work and no set definition of allowable holidays or periods of sickness. Yet presumably making a declaration that the revenue consider to be false could land you in trouble.

TITEASCRAMP

ScotInEngland wrote: »

I think what the OP is getting is the 'hours worked per week' question. You have to state how many hours a week you work as there are different rules and allowances for different hours ie. under 16 hours, over 30 hours.

Trouble is as a self employed person it can be difficult to produce an accurate figure, there is no set definition of what counts as work and no set definition of allowable holidays or periods of sickness. Yet presumably making a declaration that the revenue consider to be false could land you in trouble.

Thankyou thats what I meant really. As far as Working Families Tax Credits go. You need to say how many hours. But how much holiday can I take or how much sick?
It's very confusing.

Elaine_Wilson

I assume the poster is referring to the tax credits form. As ScotInEngland says the regulations are short on definitions. The last time I looked the help pages were among the most unhelpful ones I have come across.

But look on the bright side. As there is no clear guidance then you should not get into trouble providing you take a reasonable approach.

I think many self employed underestimate the time they spend in their business. I would include all of the following -

time actually working
travelling to jobs
preparing quotes and estimates
record keeping and dealing with accounts and tax return
dealing with the bank
planning e.g. cash flow forecasts or an advertising campaign
keeping up to date with developments in your particular (or related) industries
probably a lot more than I can think of right now.

As for calculating weekly hours I was advised (by HMRC) to use the hours worked in a typical week. So, within reason, holidays should not distort the figures. If you normally work 40 hours a week then that is your "average", even if you only work for 48 weeks in the year. Of course, if you took 6 months off each year I think this may pass into the realm of unreasonable.

The big problem is that the tax credit system appears to have been designed by people who have no concept of self employment. It could do with an overhaul.

toby_puppy

ScotInEngland wrote: »

I think what the OP is getting is the 'hours worked per week' question. You have to state how many hours a week you work as there are different rules and allowances for different hours ie. under 16 hours, over 30 hours.

Trouble is as a self employed person it can be difficult to produce an accurate figure, there is no set definition of what counts as work and no set definition of allowable holidays or periods of sickness. Yet presumably making a declaration that the revenue consider to be false could land you in trouble.

Ah, sorry - I was referring to the Self Assessment Tax Return - I see what you mean now with the Tax Credits form.

toby_puppy

Elaine_Wilson wrote: »

The big problem is that the tax credit system appears to have been designed by people who have no concept of self employment. It could do with an overhaul.

very well said, I totally agree!