A Payment A Day - Part 8!

fedupandskint

£5.83 today into cash pots

Silaqui

Mary, if I tried to explain Lost I'd be here all night - and if you don't like the randomness then you probably would hate the latest developments! In a nutshell they are trying to find out who will become the next leader of the island, whilst being led astray by a possibly evil being, whilst flashing between an alternative universe. But Sawyer is still hot for when it alls too difficult to understand!

I've been out at the football today we won 4-1 wooop! And it was such beautiful weather, hope you've all been enjoying it! We even had a whippy icecream, lovely

A small pad of £1 again for me please.

Just watching Avatar, not particularly good as far as I've seen. Story is a bit boring.

xx

scoobylicious

£1.17 for me please sashy

Paulgonnabedebtfree

18p today please

frasersmum123

Morning,

£2.18 to Very for me today please.

Enjoy the sunshine everyone

mooomin

frasersmum123 wrote: »

Enjoy the sunshine everyone

Ooh, not in Edinburgh, it's chucking it down raining!

£1.98 to the shrapnel pot for me please - I'm going to have to count it up now as there's no spare for any more change!

Silaqui

Another sunny day here too! Looks lovely outside, shame I got all the washing done yesterday really haha.
£1 pad for me today, I'm off to the pub later and then Tesco.
Have a good day everyone xx

nickynoo08

Morning everyone

Forgot to post yesterday so my pad for the weekend is £2.70 to my pad tin.

Hope everyone is having a nice weekend, we're off out for a pub lunch today, i cant wait:D

Paulgonnabedebtfree

angelicmary85 wrote: »

Sorry just a quick in and out for me

I'm not going to post my pad just now I just want to ask a quick q about tax and NI...

When you're self employed, how do you go about paying it and how do you know how much you owe?

Have to run, lunch is burning...Thanks to anyone (Paul maybe?) who knows the answer...I don't really have time to search for the answer!! xx

I never saw this before but have had a bit of time to skim through posts this morning.

Bear in mind I'm no accountant but the stuff below is just a rough guide. No responsibility taken for any errors OK?

Firstly, if you go self-employed you should tell the HMRC within three months or you can get fined (£100 I think).

If your profits are less than about £6k a year, you shouldn't pay any tax - though bear in mind that on your first year your PAYE income will also be taken into account. As it's only mid April, if you were to go self-employed shortly, this wouldn't have too much effect. PAYE income to date (since 6/4/10) would be taken into account when assessing your tax bill though this probably wouldn't make much difference to the bill as the PAYE is taxed at source anyway (assuming you earn enough).

If your profits are less than about £5k a year, you will not have to pay NI. I think you still have to register though - but claim exemption. If you do end up paying NI, this is charged at about £2+ per week (billed quarterly or by monthly direct debit). Also, there is further NI on profits above about £6.5k or £7k. This is charged at around 8 or 9%. So once your profits go over around the £6.5 or £7k mark, you are effectively paying nearly one third to the state. This is because profit above £6k ish is taxed at 22% (or thereabouts). I will assume that you won't be reaching the higher taxation thresholds where the tax rate goes up to 40%. That kicks in around the high £30k's.

How much to put aside for the bill can be tricky as you need to estimate what you will earn before you have earned it.
It is possible to set up a direct debit to pay the tax on a monthly basis. If you would feel under pressure to meet these payments, you can instead set up a bill payment facility on your internet/telephone banking to pay varying amounts as and when you are able. I do the latter - though there is always some left to pay when the bill comes in as so much of my income is used to pay other debts. Also, you can go directly to their website and makew a payment by debit card. I don't do this as it takes several days or it to leave my account and if there is a lot happening, I can lose track.

Now when I say profit, I mean profit - not turnover. There are things that are business expenses that you couldn't offset against the tax bill if you were on PAYE. Depending on what you do these may include things such as:

running costs of a vehicle (or a proportion of)
telephone charges (or a proportion of)
work clothing (this is normally restricted to safety clothing and clothing with company logos. Nothing to stop you buying the logos separately I suppose with the intention of stitching then on one day)
a small proportion of heat and light in your home if you do any work from home. This cost may also include the washing/ironing of work clothes. Even keep receipts for stuff like washing powder, washing machine repairs, iron replacement. Obviously you can't put these things down as total business expenses but if anyone ever wants to take a look, you can throw them into the mix as part of your home costs associated with your business.
gifts (aka bribes ) to customers (I believe this was clamped down on many years ago. The last time I looked it had a maximum of £10 per customer per year.) This one used to be badly abused many years ago but I think it was stamped on by Nigel Lawson in the Thatcher era. However, it is perfectly reasonable to offset the costs of say a Christmas card (incl. postage) to each customer. It would also probably be OK to wine and dine a few customers in the hope of securing a larger contract (subject to a maximum of £10 each) - not that I've ever done any of this.
Medical expenses are excluded but medical appliances are permitted. I once needed something to wrap around my lower back for a while and I legally offset that against tax.
Any stationery you need for your work. Possibly computer costs including internet (or a proportion thereof).

Some items are part work/part personal. It's up to you to make a reasonable guess at the proportions but always keep it to a level you can justify in case they ever investigate your affairs.
Always keep all receipts for 7 years minimum (that's 6 years + the current one). This also applies to bank statements and credit card bills. If you receive money that is not part of your taxable income, always keep proof of where it came from.

It is usually a good idea to enlist an accountant. For simple businesses you can probably get one for £200 a year. If not, the taxman is obliged to provide the service for you. However, although they have a legal duty to behave honestly, where a grey area crops up, they might favour themselves rather than you.

The general rule is to keep it reasonable and never claim for anything (or a proportion of) that you couldn't reasonably justify in an investigation. Even if a few items were disallowed as expenses, if they feel that you're not taking the pee, they are usually easier on you. Bear in mind that if you get caught doing outrageous stuff, they don't just claim the extra tax from you, they can also impose extra penalties and even bill you extra for previous years as they will assume that you pulled similar stunts in earlier years.

Not a technical answer and probably some inaccuracies but that's the general gist of it.
Might be a good idea to get an accountant. Accountancy fees are also tax deductible BTW.

sashybo

Hi all, the total for 17th April was £41.66. :eek: