When will I ever learn

darwins_mum

Hello everyone, I was active on these boards a few years ago and got loads of help and support. I hope I was also able to offer support tomothers as well.
I thought I had learned my lesson, but never really tackled my shopping addiction. This has led to further debating, borrowing and now I find that I may have undeclared taxable income. This was a genuine misunderstanding on my,part. To cap it all, Hmrc overpaid me 10k earlier in the year which I have practically frittered away on rubbish. I have 3 tax returns to submit and am dreading the bill. Worst of all, I have no work for the foreseeable future as I ended a contract early due to physical exhaustion.!
I have drawn up a mini budget that will see me through for a month or so, but I can't see my way forward.
I am selling a few of my purchases so will be able to pay a bit towards debt, but need a bit of a better game plan.
I am tired of constantly sabotaging myself and want this to be the last time I am in this place. I feel very ashamed of myself, and have told no-one else about any of this.
DM

EssexHebridean

Well first off well done for being brave enough to come back and admit to your issues - that's a tough step you've taken already.

You know the deal already, so get your SOA done and post it up and the suggestions will flow as you know. The mini budget it a start but you need a plan going forward, and you need it ASAP.

As for the tax returns, well you know it's daft letting them slip don't you. Tackle them one at a time - and in date order otherwise you'll muddle things still further. Rack your brains for anything you need to claim back against tax too obviously. Get on and do them though - frankly you must be so stressed worrying about not having done them, it can't get a lot worse, can it.

As for the work situation, any chance the contract you were on would take you back on or have they already filled the gap? Otherwise you have to find something - obviously look for your "normal" self employed work but also at this time of year you stand a decent chance of picking up something seasonal. To be honest you just need income of some sort.

darwins_mum

EssexHebridean wrote: »

Well first off well done for being brave enough to come back and admit to your issues - that's a tough step you've taken already.

You know the deal already, so get your SOA done and post it up and the suggestions will flow as you know. The mini budget it a start but you need a plan going forward, and you need it ASAP.

As for the tax returns, well you know it's daft letting them slip don't you. Tackle them one at a time - and in date order otherwise you'll muddle things still further. Rack your brains for anything you need to claim back against tax too obviously. Get on and do them though - frankly you must be so stressed worrying about not having done them, it can't get a lot worse, can it.
The stress has got me half crazy. Procrastinating about it is prolonging the agony.

As for the work situation, any chance the contract you were on would take you back on or have they already filled the gap? Otherwise you have to find something - obviously look for your "normal" self employed work but also at this time of year you stand a decent chance of picking up something seasonal. To be honest you just need income of some sort.

I have left the contract once before and gone back. The work itself is quite well paid but very emotionally draining. I have another small source of income that will tide me over for a few weeks. A spot of seasonal work in a different field might help me gain perspective. Thanks for your input.

darwins_mum

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1600
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 700
Total monthly income.................... 2300

Monthly Expense Details
Mortgage................................ 300
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 100
Electricity............................. 44
Gas..................................... 44
Oil..................................... 0
Water rates............................. 12
Telephone (land line)................... 25
Mobile phone............................ 15
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 100
Clothing................................ 20
Petrol/diesel........................... 120
Road tax................................ 12
Car Insurance........................... 35
Car maintenance (including MOT)......... 30
Car parking............................. 5
Other travel............................ 10
Childcare/nursery....................... 0
Other child related expenses............ 40
Medical (prescriptions, dentist etc).... 19
Pet insurance/vet bills................. 0
Buildings insurance..................... 11
Contents insurance...................... 11
Life assurance ......................... 41
Other insurance......................... 0
Presents (birthday, christmas etc)...... 20
Haircuts................................ 20
Entertainment........................... 30
Holiday................................. 0
Emergency fund.......................... 40
window cleaner.......................... 5
Gardener................................ 10
Tax..................................... 0
NI...................................... 0
cleaner................................. 64
lessons................................. 40
gym..................................... 50
Total monthly expenses.................. 1273


Assets
Cash.................................... 0
House value (Gross)..................... 120
Shares and bonds........................ 0
Car(s).................................. 2500
Other assets............................ 0
Total Assets............................ 2620


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 80000....(300)......1.9
Total secured & HP debts...... 80000.....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Cabot..........................200.......10........0
Arc............................900.......10........0
Apex...........................11000.....10........0
hmrc self assess...............8000......0.........0
hmrc tax credits...............770.......120.......0
Total unsecured debts..........20870.....150.......-


Monthly Budget Summary
Total monthly income.................... 2,300
Expenses (including HP & secured debts). 1,273
Available for debt repayments........... 1,027
Monthly UNsecured debt repayments....... 150
Amount left after debt repayments....... 877

Personal Balance Sheet Summary
Total assets (things you own)........... 2,620
Total HP & Secured debt................. -80,000
Total Unsecured debt.................... -20,870
Net Assets.............................. -98,250

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

darwins_mum

Here is my SOA, it is based on when I am in contract. When I am at work, my food bill is marginally higher - maybe 30 a month more.
My extra income comes from renting spare rooms in my house, so is not always guaranteed. I have no sensible pension plan, nor have I been saving for my tax and national insurance liabilities.
My first step is to keep a spending diary to see where the money gets frittered away to.
Any other suggestions from you helpful folk?
When times have been lean previously, I have sold stuff on eBay and FB. I can be thrifty when necessary, but with my current level of debt, I feel that a drastic plan is now needed.
eeeek

EssexHebridean

I'll have a proper look at the SOA later but - for now - every time you get paid anything that counts as taxable income, from here on in, you need to siphon off 23% or thereabouts straight away and put into another account. I always used to tell myself that that amount wasn't mine - it belonged to the taxman, therefore spending it was stealing. I chose to over-estimate slightly firstly to ensure I'd set aside enough, and secondly so that I had a bit of a savings buffer behind me to act as "holiday pay". This method really does work - better still if the account you use requires notice on withdrawals - you only need to go to it twice a year after all.

Your other option on this is to make payments on account to HMRC so your account with them stays in credit - but obviously you earn no interest on your money then.

darwins_mum

EssexHebridean wrote: »

I'll have a proper look at the SOA later but - for now - every time you get paid anything that counts as taxable income, from here on in, you need to siphon off 23% or thereabouts straight away and put into another account. I always used to tell myself that that amount wasn't mine - it belonged to the taxman, therefore spending it was stealing. I chose to over-estimate slightly firstly to ensure I'd set aside enough, and secondly so that I had a bit of a savings buffer behind me to act as "holiday pay". This method really does work - better still if the account you use requires notice on withdrawals - you only need to go to it twice a year after all.

Your other option on this is to make payments on account to HMRC so your account with them stays in credit - but obviously you earn no interest on your money then.

I previously made payments on account to HMRC, I know I wasn't earning interest but I knew it was reaching my tax bill.
I will start doing that again in preparation for January.

MrsTinks

I'm about to start some SE work again in addition to my full time job soon so will need to re-enter the realms of self assessments bah humbug - it's a pain and chances are they will mess something up LOL

When I was SE before I did like EH - I stuck 20% aside from every payment and when tax time came round I usually had a little pot to enjoy lol mainly because I hadn't earned enough to need to pay tax on a lot *sigh* but at least HMRC didn't have cause to chase me which I always saw as a bonus!

Chin up - you can totally do this - if you find it's easier to pay directly to HMRC as you go then forget any interest earned, it will be worth the peace of mind knowing you won't get a shock at the end of the year!

enthusiasticsaver

Do you really have £877 spare each month? What are the lessons for and child related expenses when you don't have child living with you?

Can you stop the cleaner, gardener and gym? Presumably you are going to have to make arrangement to repay the £8000 tax?

darwins_mum

enthusiasticsaver wrote: »

Do you really have £877 spare each month? What are the lessons for and child related expenses when you don't have child living with you?

Can you stop the cleaner, gardener and gym? Presumably you are going to have to make arrangement to repay the £8000 tax?

If I had £877 spare each month, I wouldn't be £20k in debt. These figures are based on me working 37 hours a week. Which I don't always do. Happy to do my own housework and gardening when I am not at work, but my contracts normally involve either 10 hour days or working away from home, so no time to do these jobs.
I have a child at University that I support financially. Often more than £40 per month. Happy to reduce my language and music lessons while I am out of contract. I should probably do another soa with just my income while I am out of work. The unpredictability makes it hard to plan.

jonathanlivingstone

House value only 120?

With an 80k mortgage think there is a mistype ;-)

I would be tempted to lose the gym monthly figure of 50 per month