Tax discussion -was -At the risk of being flamed !!

nightswimmer

soolin wrote:

Technically as soon as you started selling goods for profit, as opposed to stuff you happened to find under your bed (I mean books and old Cds tsk tsk), you were trading. The Revenue do not have lower limits for declaration.

I thought there was an allowance below which you didn't have to pay Income Tax (About £5000 IIRC)? Or do you still have to declare even if you won't end up paying tax?

arushofblood

I think for me the accountant talk would be a wise move ! Thanks again Soo.

soolin

nightswimmer wrote:

I thought there was an allowance below which you didn't have to pay NI (About £5000 IIRC)? Or do you still have to declare even if you won't end up paying tax?

There is a difference between taxable limits and declarable limits. Everyone has a tax allowance, which is deducted from all earned and unearned income, plus *some* benefits before tax is applied. However, even if your self employed income is less than your allowances you are required to make a declaration to the Revenue, although no tax will be payable. if you already have a job then any additional income will be fully taxed as your allowances will be used against your main income first.

This is quite interesting;

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/01/06/cmonline06.xml

Derek Levy, partner at Hacker Young, said: "It is unlikely to occur to the casual trader, who dabbles a bit at Christmas, to register with HMRC.

"But whether the trader is under the taxable threshold is irrelevant – and this is where people will get caught out.

Edit: it also says this:

"They have undercover tax inspectors posing as buyers."

Here is the official HMRC info:

http://www.hmrc.gov.uk/guidance/selling/index.htm

soolin

Sorry, I'm on a roll now!

National Insurance actually kicks in before tax..and here are the details:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_4015904

If you're self-employed
you pay 'Class 2' NICs at a flat rate weekly amount of £2.10
you also pay 'Class 4' NICs as a percentage of your taxable profits - you pay eight per cent on annual taxable profits between £5,035 and £33,540 and one per cent on any taxable profit over that amount
if your earnings in the 2006-2007 tax year are expected to be less than £4,465 then you may be entitled to the Small Earnings Exception (SEE), meaning you don't have to pay any Class 2 NICs - you can apply for SEE for the 2006-2007 tax year on form CF10

soolin

I promise I'll stop now!

These are the *current* tax allowances referred to by nightswimmer:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/DG_4015583

arushofblood

I'm so bad at all this ! My mind just doesn't take in all this complicated stuff ( complicated for me that is ) My eye's skim over it all....Aaarrgghhh I hate it ! Guess it's something I need to get used to though..... I'll put the kettle on...

soolin

I find a chocolate biscuit helps as well!

arushofblood

No worries by me Soo ! You're a great help for pointing me in the right direction ! Thanks again .... *mutters* even if I don't really want to know all this, I guess I have too....;)

arushofblood

soolin wrote:

I find a chocolate biscuit helps as well!

Noooooo ! I'm so easily tempted, don't say that, lol. One leads to two... three... and so on

Unless I can offset the cost that is ?

soolin

arushofblood wrote:

Noooooo ! I'm so easily tempted, don't say that, lol. One leads to two... three... and so on

Unless I can offset the cost that is ?

When I used to be a tax accountant (which I haven't been for many years), it was quite common for clients to give me receipts for everything!

So, they will have been to makro and bought office chairs, or stock or whatever and give me the bill for £800, but when I checked it I would find they'd all bought their Christmas booze, or a pallet of biscuits for the office and expect it all to go through as an expense. Garage receipts were also a problem as many clients would think nothing of buying fuel every day (which was claimable) but then expecting the cigarettes, sweets and drinks bought at the same time to go through on a nod as well!

I'm strict me.

Soo