First (& probably only) year as Self-Employed; Questions

Catseyez

Hi,

I'm hoping someone can help answer a few questions.

Since April 2005, I have been registered as self-employed as I have done some freelance work. At the same time, I am also registered as PAYE (paying NI and tax through them every month) at a company I do part-time work for (entirely different field of work). Inland Revenue is fully aware of this. I'm now preparing to get my self-assessment for 05/06 out of the way.

My questions are:

1) I have a mobile phone that is paid for monthly. Between April 2005 and December 2005, I didn't receive itemised billing. To get copies now it would cost me just under £20, something I wish to avoid. As I used the phone to make work-based calls during that period, do I need to get copies or can I just submit it as a 'summary of charges'. The problem is, I also used it for personal calls.

2) I'm paying too much NI. I registered at the higher rate, thinking I would have a lot of work coming my way but it didn't materialise. Will the IR take this into consideration when I submit my 'self-assessment'?

3) As I only did a small amount of work, the cost of an accountant would probably be half of my total earnings. I wish to avoid this cost and am prepared to do it myself. What's the best way to approach this?

4) For a few years before I registered as freelance, I paid for training and equipment. I have kept all of my receipts...how far back can I claim? Is it three years?

5) I've reached the point where I no longer wish to persue my freelance work anymore. I'm having a career change and so don't have any plans to do any freelance contracts in the next financial year. Can I just phone the IR and advise them of this? Is it possible to terminate the NI contributions?

Thanks for your help. I'm feeling very overwhelmed by it all!

BlondeHeadOn

Mmmm - I have been self-employed for several years now, and for 6 of those years had a PAYE income too, and it wasn't a problem - you just have to declare both to the tax people on your self-assessment form. For the rest of it I used an accountant though, as I couldn't face doing it all myself.

What I would suggest is getting the phone number of your local business link/enterprise agency (or whatever they are called now), and asking them for advice. I used mine a lot when I first started up, and they were very helpful and better still, free of charge. Particularyly on the tax and legal side of things my local agency was excellent, and saved me a lot of money.

They also usually have a list of small businesses in the area, and these can include free-lance accountants who are cheaper than the big companies - in case this is decided to be better.

I'm also sure that someone on this site will be much more use than me, so better advice will no doubt be along soon.

Good luck with it all.

Justin_Credit

Hi Catseyez,

With regard to your mobile phone, if it is a personal phone but you make some business calls on it then you can claim for the cost of those calls. If it is a business phone then you will be able to claim line rental and cost of business calls.

Unfortunately though, to claim anything against tax you do need to provide proof, so you will have to apply for the itemised billing. The only exeption to this is if an expense is of a very minor nature.

Not sure what you mean about the N.I. payments and the higher rate. All self-employed people pay N.I.Class 2 contributions at the rate of £2.10 per week during the current tax year, then pay 8% of any profits over £4895 as N.I. Class 4 contributions.

Sorry I don't know enough to be able to answer any more of your questions but hope this is of some help. I'm sure there will be others along soon to give you some answers.

Regards JC

Trow

As far as filling in your own self assessment tax return goes - contact your local tax office - they run free short courses, one of which is for people filling in their self assessment form - I think you would find this helpful. The people that run the courses are usually people with experience working in the Inland Revenue for some years and they are open to you asking questions - so professional advice at no charge! It is not the equivalent of an accountant, but as your quantities are small its well worth a try.

flossy_splodge

I have been registered self employed since April 2004 or so and have found the Business Link course which an Inland Revenue lady was the presenter for was first class. It was all shown to be so straightforward. Only comment is kepp EVERYTHING, petrol receipts, cups of coffee with clients receipts, parking ticket stubs etc etc. It.s only when you come to actually DO the form that you really start to think about those genuine items of expenditure you now have no proof of! Did my return this year myself. Had a problem with the forms on the IR web site and used the tel no shown and my goodness, the IR people I spoke to could quite simply not have been more helpful or patient. Go for it. You may be surprised what you can do! Also helps focus the mind in subsequent years about what and how you spend for/on the business. Good luck.x

blingal1

Check out Business Link Web page https://www.here4business.co.uk has some very useful advice. Also up here in the North the Inland Revenue come out to your house free of charge and help you get your books set up from the begining a great help when starting out.

Blingal1