Self assessment/self employed question

chilli_green

Hi all.

Hopefully a simple question about tax as a freelancer.

I work in TV production and get paid on an invoice basis, I get the gross amount and do a tax return at the end of the year.

At the moment I just do my self assessment based on my earnings and accept whatever HMRC says I owe in tax. But I've never graduated to the level of doing the full 'collect every receipt and claim back VAT at the end of the year' thing, which I also understand includes getting a tax relief on things like equipment that I could argue are work related expenses.

Perhaps it's more of a question for a friendly accountant but... at what stage of employment/earnings is that worth it? What additional status do I need to be, a Limited Company?

uknick

Do you need to be registered for VAT? If you don't know the answer to that, I'd strongly suggest you do talk to an accountant; they don't have to be friendly, just know what they're doing.

polymaff

chilli_green wrote: »

... But I've never graduated to the level of doing the full 'collect every receipt and claim back VAT at the end of the year' thing, which I also understand includes getting a tax relief on things like equipment that I could argue are work related expenses.

... at what stage of employment/earnings is that worth it?

When it sounds like you are thinking of "collecting every receipt" etc.

Not that you shouldn't - but the test is "was the receipt for something that was wholly and exclusively used in that business". An accountant can help you with this. So - for free - can your conscience.

Rachr

You an elect to takes a tax flat rate. Which depends on your tye of work whi h makws claiming easier shpuld you wish to go Vat registeted. However depeneding on how much you earn (you have to registet if your income is over78k) it robably isnt worth doing. Re Ltd that depends in a very simplified way of what you shpuld have to lose if the company got into trouble Obviously its morecomplex than that but my very rough rule of thumb for clie ts is, if you have people reliant on your income, you dont rent and have no substantial svings behind ou then think hard if you could affprd to lose your house, vehicle and possesions. As self employed you are personally liable for any debts of to ur business. If ltd then only things belonging directly to the busines can be sold. Its a very simplified guide but i hope that helps.