Advice for a new Freelancer?

Dawalka

Hi all,

hoping some of you fine and helpful people can offer some advice? I was not sure where to put this but guess here would be most apt. If not please feel free to tell me where to go!:rotfl:

I am just beginning to get some Freelance interest for my services and am keen to stay on the right side of the law (Tax Man) so I need to know the following.

1. How do I go about registering for tax on the extra income (self assessment?)?

2. Can I claim tax back against some of my business equipment (I will need a dedicated laptop for my business) - if so how? Also how much can you claim back, is it just the VAT?

I think that is it for now! Thanks all

Lee

Cybi-Ping

Everything you need to know is on here http://www.hmrc.gov.uk/

DS4215

Dawalka wrote: »

2. Can I claim tax back against some of my business equipment (I will need a dedicated laptop for my business) - if so how? Also how much can you claim back, is it just the VAT?

You can claim necessary business expenses out of your turnover. So, a laptop, printer, desk, chair, paper, ink, etc will all be ok - while a iPod or holiday probably won't be! You can also claim for a proportion of the household bills for the time that you are working self-employed from home.

Tax is at basic rate on everything unless your total earnings go over the threshold then it goes up.

Registering and completing a self-assessment online is easy (I managed it twice), and if you complete early you can arrange to pay the tax owed out of your tax code for the next tax year - I was told the deadline is November.

googler

You can only reclaim VAT if you're VAT registered.

You don't HAVE to be VAT registered unless your turnover exceeds £70-80k or so, but you can register if you want to below this level. However, if you do, you have to submit a VAT return every 3 months detailing your input and output VAT, total sales, expenses, and, if that shows a net amount due to HMRC, pay it promptly (or receive a refund from them).

This will entail getting VAT receipts (not regular receipts) for everything business-related, and a tri-monthly adding-up session for you. You can't reclaim VAT for selected items, and not account for VAT on others - it's all or nothing.

gb12345

googler wrote: »

You can only reclaim VAT if you're VAT registered.

You don't HAVE to be VAT registered unless your turnover exceeds £70-80k or so, but you can register if you want to below this level. However, if you do, you have to submit a VAT return every 3 months detailing your input and output VAT, total sales, expenses, and, if that shows a net amount due to HMRC, pay it promptly (or receive a refund from them).

This will entail getting VAT receipts (not regular receipts) for everything business-related, and a tri-monthly adding-up session for you. You can't reclaim VAT for selected items, and not account for VAT on others - it's all or nothing.

It is also worth pointing out that if you are VAT registered and your clients are not then you will be at a disadvantage as your prices will be 20% higher to them, so think carefully about registering if you don't have to.