Self asessment fear!

lamialex

Hi there,

I think I may be in trouble with the tax man! I have been working for a landscaping company for the last five months, I've been working as a subcontactor but just paid for labour. So apart from my own tools, I have not been providing any materials.

During this time I've had a pretty hard time and I've struggled to keep up with work, let alone keeping up with my financial records! I know I am completely daft but I have hardly any receipts/records for this period. The situation was made worse by my already patchy 'record box' being mistaken for rubbish and being thrown out, ouch!

All I want is to be able to pay my taxes so that I am able to stop worrying about it, but I am unsure about how to proceed with the IR? Also I don't want to get the guys who give me work in trouble, as I am told that they could be liable to pay the tax if I don't.

I am working for the next three weeks and then going to America for a month to help a friend ladscape his garden, after this I will resume work.

I would vastly appreciate any advice anyone here can give me :A

Thanks for reading.

Paul.

silvercar

The short term answer is that you have time on your hands. Work done during the tax year 2006-07 (ie before 5 April 2007) will need to be included on your tax return and tax paid by 31 January 2008. If you intend filing your tax return online, you have until 31/1/08 to complete the return.

Any work done in the remainder of 2007 is part of the following tax year, so you have longer to sort your paper work out.

In the short term right down as much as you can remember, dates worked and pay received then ask the company to fill in any gaps. Even if your paperwork has disappeared they must have a record of what you were paid.

PasturesNew

I have to do a tax return sometime ... er soon. For 2006-2007 it would have been nice to do it by today, but it didn't happen

So I always do it on 31 January then drive down the tax office, desperately posting it through their letter box.

Anyway, I'm sure there's a box there that says if you've earnt under £15,000 you tick that and tell them the outline figures (in/out/tax you owe them) - you only have to break it down if you're over the £15k

Hope that helps

System

PasturesNew wrote: »

Anyway, I'm sure there's a box there that says if you've earnt under £15,000 you tick that and tell them the outline figures (in/out/tax you owe them) - you only have to break it down if you're over the £15k

Hope that helps

Thats true provided th £15k is over a full tax year.

If it's £9k and you've only been self employed 5 months then that equates to 9/5 x12 = £21.6k over a full year and so you can't just do a 3 line account, you would have to complete the more detailed next page of the return:o .

Also next year if you want HMRC to calculate how much you owe them (if anything) then you will have to have your paper and online returns filed by 31 October 2008. You still have until 31 January 2009 if you want to calculate your liability yourself BUT there is talk that between 31 October 2008 and 31 January 2009 ONLY returns filed online will be accepted.

HTH

lamialex

Thanks for the kind responses Silvercar, Pam17 and PasturesNew!

My main concern is that I have not informed the inland revenue that I've become self employed. But do I just do my online tax return for 2007/2008 at the necessary time and leave it at that?

I have records of all the money I have recieved from the guys so that's something at least.

So if you earn below 15000 in a tax year, the form is simpler? I see, this could be the excuse I've been looking for to not work too hard during the winter months! :T

It's amazing to be able to recieve your advice and you are all very kind, I will endeavor to pass it on!

PasturesNew

jimmo wrote: »

Pasturesnew, we all leave things to the last minute but please think about it. 31 Jan is the last possible moment for submitting the Return but how do you ensure that you have paid the tax in time?
If you are capable of posting here you are certainly capable of making an on-line Return. If nothing else it will save a car journey.

I know, just my head wasn't really together those years. I never choose to be self-employed. Just whenever a job finishes and I scout around for the next/first one, I find other things that will bring in a few bob, which invariably means they want you to be self-employed.
So I am doing all sorts of random things across the year, juggling with getting new jobs, being laid off.. and I was running an old 6 bed house all alone without the income to keep it all going tickety boo.
So generally I was a bit of a mess rather than being organised.
But that's all behind me now and things will be simpler. I've just changed addresses 4 times in the last 3 months, but am now settled. So planning on doing it soon. And then keeping on top of it better.

As for the online thing, I did try once to register, at the 11th hour, but there wasn't the time as all you do online is register, then there needs to be a number of days/couple of weeks while they send you something out and you verify it ... anyway. That never happened. And this will only be my 3rd return, so it's not been many/many times to be honest.
Probably can't do it this year anyway by the car method .... I moved 200 miles away and will probably be dealing with the old tax office.

System

lamialex you need to register as self employed asap as you are supposed to register within 3 months of starting otherwise you can incur a penalty of £100.

When you register you will be given your UTR as Jimmo said and then you can get yourself registered for online filing. You will also be told about class 2 and class 4 National insurance contributions.

Class 2 - £2.20 per week if your taxable profit is above £4635
Class 4 - 8% if your taxable profit is between £5225 and £34840
1% above £34840

See here - http://www.hmrc.gov.uk/rates/nic.htm

misscampbell

Hi
I wonder if anyone can help?
A friend has just rung me worried about registering as a sole trader with the tax office. She has been doing one off web design as a favour since November 2006. The work has been sporadic and it began as a hobby. Now she wants to register but has just foun out about the 3 month period. She is worried that the tax office will fine her although she was not aware, she thinks they will not take that into consideration. So what does she do?
Many thanks for help and advice.
Jane

System

misscampbell wrote: »

Hi
I wonder if anyone can help?
A friend has just rung me worried about registering as a sole trader with the tax office. She has been doing one off web design as a favour since November 2006. The work has been sporadic and it began as a hobby. Now she wants to register but has just foun out about the 3 month period. She is worried that the tax office will fine her although she was not aware, she thinks they will not take that into consideration. So what does she do?
Many thanks for help and advice.
Jane

If your friend received income from this hobby during the 2006/2007 tax year she will have to register asap as she has to complete a tax return for 2006/2007 before 31 January 2008.

fengirl_2

Your friend has realised that they have missed a deadline - what favours will they be doing themselves by extending this deadline? Just go ahead and fill in the forms and take the fine if it's imposed - putting it off won't make the fine less!

Yorkshire-Lady_3

I wont go into great detail, but I was self employed for a long long time before I was finally 'cought'. I wanteed to register, but the longer it went on, the harder it was. It's 12 months now since I received the letter saying they held information about me leading to believe I was working, and I was both devastated and overjoyed at the same time.

The lady I dealt with was wonderful, and really understanding. The upshot was that I HAD kept excellent records and I was able to get my affairs in order and pay what I owed.

The people at the IR would much rather you contacted them and explained, rather than try and make excuses.

Phone them and ask to speak to the compliance officer.

Try not to worry too much,

Sally