Why give it to the tax man???

marty8071

Just done my tax return for the 2016/17 and despite earning £60000 ( self employed) I now have a tax bill of about £18000. I dont have many expensives to off set against it but wondering us there anything I could to to help reduce the amount of tax I have to pay. Hopefully I'll earn the same this year (fingers crossed) so if I can do anything would help

[Deleted User]

Hi,

think you might get a fine as well if only submitting 2016/17 return now.

Dazed_and_confused

frugalmacdugal

I think you are a year ahead of yourself, 2016:17 tax year only finished a few months ago!

marty8071

If you are genuinely self employed then pension contributions are usually considered quite tax efficient, particularly where taxable income is over the higher rate limit, £43,000 this year (or £45,000 outside Scotland).

SIPP/personal pension payments receive basic rate tax relief at source and also increase the amount you can pay tax 20% tax on which would benefit someone with your level of income.

For example if you had paid £8,000 last year (2016:17) your pension fund would have £10,000 in it from the basic rate relief and your tax bill would have been £2,000 less so £10,000 in your pension would have effectively cost you £6,000

[Deleted User]

Hi,

oops, , sorry.

Aye, I do my own SA and have already submitted mine, but think deadline is January 2018.

xylophone

( self employed) I now have a tax bill of about £18000.

https://listentotaxman.com/

Check your tax.

Are you self employed or employed by your own limited company?

Had you looked into pension contributions?

http://www.hl.co.uk/pensions/interactive-calculators/tax-relief-calculator

https://www.pensionbee.com/pensions-explained/pension-contributions/contributing-to-your-pension-from-your-limited-company?ast=wjgHl9

TheCyclingProgrammer

£18k sounds high, are you including your payments on account because I estimate your tax (assuming no expenses) to be approx. £12-13k.

Pennywise

TheCyclingProgrammer wrote: »

£18k sounds high, are you including your payments on account because I estimate your tax (assuming no expenses) to be approx. £12-13k.

On £60k taxable profit, I get tax of £13,230 and NIC of £3,630 so a total of £16,830.

marty8071

Yeah sorry that's included

TheCyclingProgrammer

Pennywise wrote: »

On £60k taxable profit, I get tax of £13,230 and NIC of £3,630 so a total of £16,830.

I forgot about NIC, was just roughly doing it in my head.

TheCyclingProgrammer

marty8071 wrote: »

Yeah sorry that's included

Well if you're including your payments on account remember these are towards the next year's tax bill.

What expenses have you claimed for to reduce your taxable profit?

kidmugsy

Long term, have you considered setting up a limited company and selling your services that way?