Time to get an accountant?

quatrofromageo

As an extra source of income I do blogging and freelance writing on the side. So far it's all been paid into my Paypal account, but it's only a matter of time until the tax man catches up with me :whistle:

Been speaking to SJD who deal with freelancers, but thought I'd ask here if I really need to declare this stuff yet or if there's a certain level of income I need to get to before I'm in trouble.

Obviously I'd rather not have to create a limited company, but I keep getting offered more work. Just worried about the tax man taking all my money away :wall:

whitewing

How is the tax man going to take all your money away? You get taxed on a percentage of income, surely?

When did you start blogging and freelance writing?

quatrofromageo

whitewing wrote: »

How is the tax man going to take all your money away? You get taxed on a percentage of income, surely?

When did you start blogging and freelance writing?

3 years ago.
Been earning a good £150-£300 per month from that.

whitewing

I would think you would need to be declaring it, maybe get quotes from 3 or 4 local accountants. Most will give you a free initial meeting.

I have colleagues who think always do their own tax returns, but I like the peace of mind of having mine done by an accountant.

quatrofromageo

Thanks for the advice. I just hope an accountant can show me how to declare it without totally exposing myself to the inland revenue for the past 3 years.

whitewing

I think it is probably a type of situation that accountants are used to dealing with.

What do you mean about not exposing yourself? What, more specifically, are you concerned about?

InsideInsurance

The level you need to get to before you are in trouble is 3 months after first time you start trading.

The taxman has no interest in if you make a profit or loss, if you are working as a sole trader you must register as one within 3 months or risk the consequences irrespective of revenues.

Once you have offset your allowable expenses you will be taxed more or less the same amount of money as if you'd earned the same amount as an employee - generally allowable expenses work in your favour though. Obviously as you have been illegally avoiding tax you will expect to have to pay the taxes due over the last 3 years, interest and penalties but if you come clean and cooperate HMRC will often negotiate over the interest and penalties.

As a sole trader I wouldn't think that an accountant is necessary and given what I am assume is a very straightforward business I dont think it would be advisable either until you are a higher rate tax payer and even then it is probably questionable.

quatrofromageo

Hmm...but what if I diverted the payments to a different account and then declared that instead after 2 months? Could that work?

As you can tell, I'm not keen on having to pay taxes and penalties on 3 years of earnings.

whitewing

I would have thought an accountant could sort things out for you such that you would know where you stand ie how much, if anything, you owed.

Ann accountant won't submit to HMRC until you give the authority for them to do so.

You owe what you owe. If the taxman comes after you, I assume that they will estimate your extra earnings and add charges on top and start to chase.

Can't see how you will be able to work it out for yourself without being able to ask HMRC questions?

whitewing

If you do 'go it alone' you may get more tailored help from the Cutting Tax forum on MSE.

InsideInsurance

Then why should anyone pay taxes or penalties then? Believe me, I dont enjoy it when my annual tax bill comes in or anyone else on here when they get their payslips showing how much the taxman has taken.

Perhaps we should just shut down the NHS, police, fire brigade, state pensions etc and then we can all not pay tax.

You've been earning money, pay your dues on it or leave the country really should be the only two options