Freelancer, confused about regsitering for tax

MushyPeas

Full post edited post due to a reply from someone.

skintchick

Do you have all your paperwork? Did you register as self employed?

I'd get an accountant cos this is going to be messy and expensive - fines, overdue tax.

In future, always pay your tax! And put 25 per cent of all incomings to one side to cover the bill.

Hope it works out OK.

Bordera

It will be impossible to tell you what to expect based on the information you have provided but I think you should hire an accountant to deal with this for you.

Please do not worry, it might not be as bad as you fear.

Cook_County

It is very generous of you to confess on an open forum.

HMRC have power to obtain your full registration details from Martin. You have evaded tax. This is potentially a criminal offence because you are living off the proceeds of crime.

All accountants will therefore report your details automatically to the National Criminal Intelligence Service. I recommend that you see an accountant by lunch-time tomorrow to avoid the inevitable knock at the door.

You will save money because an experienced investigation specialist will negotiate on penalties on your behalf.

MushyPeas

Now I feel really scared. Have edited my post.

pchelpman

MushyPeas wrote:

I'll take your advice and get an accountant to look at things for me.

Make sure you get advice from somone who is properly qualified to give it. Accountancy and tax advice are almost the last places where the unqualified hack still gets away with murder. Inaccurate advice can wreck your life.

Qualifed advisors will have letters behind their nakes (e.g. FCA/ACA, FCCA/ACCA, CTA, ATT to mention a few of the main ones relating to tax advice) and they will have experience with professional insurance if things go wrong (very rare).

Good luck.

Murtle

I don't the ins and outs here but step up, and get it sorted out. I have always been advised that if you are trying they will help, so don't panic just keep a clear focused head and get a good tax accountant.

and good luck

x

o_t_e

Hi - it looks like the freelance work has never been your main source of income, so you've been paying tax elsewhere but not on this particular source of income - not wise certainly, but equally not uncommon.
To let you know what you're options are, if you didn't go down the route of an accountant, but simply informed the inland revenue directly all they would do initially is send you out two years worth of self assessment forms to complete. They would also put you in touch with the newly self-employed helpline which is actually part of NICO (National Insurance Conftributions Office). Yes there are likely to be penalties to pay, typically for not registering as self employed within three months of starting self employment, and for non-submission of SA returns, but it's possible some of them can be avoided.
In the 2003-4 tax year you were a full time student, did some part time work and some freelance work - it may be that in that year you have unused personal allowance to cover some of your tax liability for your freelance work. In general, penalties can be no more than the amount of tax due.
As stated above there is a fine that can be levied for not registering as self employed but if your profit from self employment is below the small earnings exception limit, £4095 in 2003-4, £4215 in 2004-5, no penalty is due and no class 2 national insurance contributions are due either.
Penalties and interest will be due on the unpaid tax -there is normally a £100 fine if a self assessment return is not submitted by the 31st January in the following tax year, and another £100 if it is not returned by the next 31st July but co-operating with the inland revenue is probably the best way to limit the amount you have to pay.
While it is true that the inland revenue can prosecute for instances of tax evasion, by contacting them and disclosing all the relavent facts there immediate recourse will be to seek a financial settlement with you. Hope this helps.

MushyPeas

Thanks for all your advise and support o_t_e. Feeling rather scared at the moment. Just phoned Inland Revenue who have asked me to get all my info. together and then go and talk to them. Wish I had sorted it earlier. Originally I was freelance for the company I used to work for so thought they were sorting the tax out. Only recently did I discover not! Thank you again for all your advice, it makes it seem like less of a confusing tax jungle.

Also asked a friend to recommend an accountant.

MP

Murtle

Don't panic MushyPeas. The inland revenue aren't the big scary ogres they are made out to be, they can be human and all they want at the end of the day is what they perceive to be theirs, all the accountant wants, is for you to pay as less as possible within the boundaries.

Don't panic.

x

MushyPeas

*deep breath* Hiya Murtle

On the phone to a lovely lady who has said 'you're not the first and you won't be the last'. Wish I had sorted this ages ago now! Also going to find about speaking with an accountant for some advice and to get them looking at it.

Thanks for your support Murtle.

MP