No Debt, No Beer

Squidge123

How much of your freelance earnings do you put away for the taxman?

InsertWittyName

Squidge123 wrote: »

How much of your freelance earnings do you put away for the taxman?

I'm a higher rate tax payer so I save 40% (give or take).

I have a spreadsheet where I list all income & expenses and it calculates 40% of the difference - I then ensure I have the 40% of the difference in my ISA at all times

Basically (income - expenses) * 0.4

I'd have to save a further 11% if my freelance income - expenses goes over about £7k as I'd have to pay Class 4 NI too :eek:

I've currently got just under £2k in my ISA for the taxman :mad:

InsertWittyName

Just got my car MoT'd and it came in at £114 (needed new front tyre and wheel alignment), pretty happy with that!

Hoping to get some payments (even if small!) through this week from my freelance work

InsertWittyName

Speaking of which, just had a small payment through from a client (I love Faster Payments)

£45, paid straight to the CC.

InsertWittyName

Invoiced client for small update job and he paid straight away.

£47.25 should be in my bank account on Friday

InsertWittyName

Been fairly busy earning and working for the past week!

The £47.25 turned up on Friday, so paid it straight towards the debt

Also been paid for (and it should be here this Friday) 3 separate jobs of £10, £20 & £500.

Should see some good payments toward the debts this month.

InsertWittyName

Cheque for £500 sat in bank waiting to clear and another tiny payment for £20 on it's way into my bank in the next couple of days.

Also received £150 as 50% deposit on another job that should be complete within a couple of weeks, a £700 job is very close to being done and just picked up another job for £200.

Busy busy

InsertWittyName

Oh another bit of 'good' news.

Received my notification to submit my tax return today and spotted an interesting point that suggested if I owed less than £3k tax (I owe about £2,250) then they could collect it monthly via PAYE in the 2013-14 year.

I already have the tax saved but would prefer to pay this toward the debt and pay back any tax I owe via PAYE.

Holding on to the thought for now until I complete my tax return - but hopeful I can keep under £3k tax to pay each year and just pay it out of PAYE

InsertWittyName

Got some big payments in today so made some big payments to the debts.

My CC now has under £1k owing, it's down to £780 Not bad from the near £6k it was at originally.

Very happy with that!

InsertWittyName

So, now my number of debts are reducing as well as the balance owed, I've realised that there was something wrong with my spreadsheet...

Turns out it was including the positive balance of my current account in my total calculation, and always has done!

I've retrospectively worked out what I owed each month and adjusted below - all should be well from now on

August 11 balance was: -£18,875.00
September 11 balance was: -£18,560.22
October 11 balance was: -£18,375.98
November 11 balance was: -£16,570.76
December 11 balance was: -£13,353.26
January 12 balance was: -£12,110.10
February 12 balance was: -£11,262.81
March 12 balance was: -£10,601.67
April 12 balance is: -£9,542.58

£1,059.09 paid off this month!

The next couple of months look like they will go the same too, hoping to hit £1,100 per month paid off