self assessment feast and famine-help!

steeple_2

Hello,
could you help me with some advice?
Ever since they changed how tax is charged in '96, I've been totally terrified by the whole thing!
I'm a self employed illustrator, mainly comic books, with my accounting year beginning on each Feb 14 .
Due to the unpredictable nature of winning commissions, i can earn £30000 one year but less than the personal allowance the next.

under the old system i just paid what i owed from the past 12 months earnings, but now they "guess" what i'm going to earn from my last return and tax me on that.

For example, if in one year I'd earn £4000, and in year two £30000, and year three £4000 ,then just before the end of my three i'd be billed in January for what i owe from the £30000 of year two and what the Inland Revenue assumes I'll earn in year three (£30000), so during year three i'd be paying tax on £60000!
i get it back in a rebate eventually, but the whole thing is just crushing me...sorry to sound such a wimp

Is there anyway to get off this crazy thing?
Can't i just hand over my %23 (ish) of profit each year and know what's left is mine , like the old system?
-steve

Aark

Is there anyway to get off this crazy thing?
Can't i just hand over my %23 (ish) of profit each year and know what's left is mine , like the old system?

No. The self employed have to follow the Self Assessment system.

I'm a self employed illustrator, mainly comic books, with my accounting year beginning on each Feb 14 .
Due to the unpredictable nature of winning commissions, i can earn £30000 one year but less than the personal allowance the next.

You might be able to claim to average your profits, have a look at http://www.hmrc.gov.uk/helpsheets/ir234.pdf (AVERAGING FOR CREATORS OF LITERARY OR ARTISTIC WORKS).

For example, if in one year I'd earn £4000, and in year two £30000, and year three £4000 ,then just before the end of my three i'd be billed in January for what i owe from the £30000 of year two and what the Inland Revenue assumes I'll earn in year three (£30000), so during year three i'd be paying tax on £60000!

If you have an estimate of what your tax liability will be you can reduce the payments on account to each be half of that amount. However, if you under-estimate interest will be charged.

Alternatively, work out your profits and complete the Self Assessment as soon as possible to get it out of the way before the July payment is due. You will still have a payment of account to pay in January each year, when applicable, but you would know what was actually due in time for July.