self employed and tax

lentrix92

Not sure if im in the right room.

I went self-employed as a consultant in June 2012. I have not started my own company as i mainly consult for 1 firm but also do weekly work for another.

I am only now starting to see 'good' income (as im comm based).

I do not expect to be a higher rate tax payer.

2 questions:

1 = when will i need to fill in a tax form/return etc ?
2= When can i expect the bill ?

With the money i need to put away for tax - can i place this in a 'high rate' account - If so is the interest also taxable ?

Or can i put it in an isa / premium bonds ?

thanks in advance

zygurat789

Assuming you have registered, and I hope you have otherwise there's a fine waiting for you, you should be sent a tax return next year as your income source started in 2012/13 tax year.
HMRC expect you to make up your accounts annually though you can choose your year end and this depends on your preferences. Your income for 2012/13 may be 10/12 of your first year's accounts.
You will have to submit your 2012/13 (self assessment) tax return by 31/1/14
and you will then have to pay tax on 10/12 of your first year for 2012/13 and
half of the full year as an on account payment for 2013/14, the other half being due on 31/7/14.
You will also have overlap profits equal to 10/12 of your first year which will be deducted from your final taxable profits in 20??/??.
What makes you think you can't do what you want with your own money - all you need to do is make sure you have it when the taxman wants it.

CLAPTON

you should register with HMRC as soon you started self employment

unless you claim small earnings exempt you need to pay Class 2 NI contributions by DD (£2.65 per week, paid quarterly)


you will receive self assessment forms after April 2013 and need to pay tax and class4 NI by 31/jan/2014

you can register to do it online.

the savings rules for self employed are the same as for PAYE i.e. you get taxed at your income rate i.e. either 0%, 20% or 40% or 50% depending upon your total (grossed up ) income

POPPYOSCAR

lentrix92 wrote: »

Not sure if im in the right room.

I went self-employed as a consultant in June 2012. I have not started my own company as i mainly consult for 1 firm but also do weekly work for another.

I am only now starting to see 'good' income (as im comm based).

I do not expect to be a higher rate tax payer.

2 questions:

1 = when will i need to fill in a tax form/return etc ?
2= When can i expect the bill ?

With the money i need to put away for tax - can i place this in a 'high rate' account - If so is the interest also taxable ?

Or can i put it in an isa / premium bonds ?

thanks in advance

As the others have said, you should have registered by now.

You can put your money where ever you please interest is taxable and must be declared on your return with the exception of ISAs.

"Q. What are the tax benefits of an ISA?
A. You pay no tax on any of the income you receive from your ISA savings and investments. This includes dividends, interest and bonuses.

You pay no tax on capital gains arising on your ISA investments (losses on ISA investments cannot be allowed for Capital Gains Tax purposes against capital gains outside your ISA).

The insurer does not have to pay tax on income and capital gains on investments used to back your ISA life insurance policies. You do not have to pay any tax when the policy pays out.

You can take your money out at any time without losing tax relief.

You do not have to declare income and capital gains from ISA savings and investments or even tell your tax office that you have an ISA."

phone_angel

George Smith, I am an accountant and often get asked for free advice which is annoying however the advice I do not mind giving for free and always say to new starts is something similar to Martin i.e. the cash is not all yours so put some away in a separate high interest account. Regarding ripping off the taxman this is rife from sole traders to large companies. Quite simply if you can afford it there are always audit firms cooking up tax avoidance schemes. This is my complaint as we should all pay fair taxes and not be greedy.

lentrix92

thanks to all for the above info.

I have already registered (June 2012) & have started class II NI's.

Thanks once again.