Self Employed Tax

Marc12345

Each year I get a bill for tax on my earnings, some of the time I don't have the amount on hand to pay strighht off, I'm think a sensible option would be for each job I do is to put aside the tax, my question is, is as to where to keep it I'm thinking a savings account but then I'm worried I'll end up paying more tax as I heard you pay tax on savings, I get rather confused with all the tax stuff I usually just do my tax return get my bill pay it, but I want to be more prepared this year as my bill will be a lot higher. 

AskAsk

you only pay tax on savings interest, so you will only pay a proportion of any interest received, not the actual savings itself.

if you are a basic rate tax payer, then you are unlikely to pay tax on savings interest as the first £1,000 of savings interest is tax free for basic rate tax payers, which i assume you are?

Marc12345

AskAsk said:

you only pay tax on savings interest, so you will only pay a proportion of any interest received, not the actual savings itself.

if you are a basic rate tax payer, then you are unlikely to pay tax on savings interest as the first £1,000 of savings interest is tax free for basic rate tax payers, which i assume you are?

Yes I am basic rate, ill probably earn around 30k this year I just want put aside likd 30%  so I don't have to worry about it when I come to my tax returns I'm unsure where to put it tho, should i put it in an regular savings? cash isa? or what, i have no clue I usually juts keep a bit my bank ready for it but i usually earn half of what I will this year, they must be a better way to prepare. 

AskAsk

Marc12345 said:

AskAsk said:

you only pay tax on savings interest, so you will only pay a proportion of any interest received, not the actual savings itself.

if you are a basic rate tax payer, then you are unlikely to pay tax on savings interest as the first £1,000 of savings interest is tax free for basic rate tax payers, which i assume you are?

Yes I am basic rate, ill probably earn around 30k this year I just want put aside likd 30%  so I don't have to worry about it when I come to my tax returns I'm unsure where to put it tho, should i put it in an regular savings? cash isa? or what, i have no clue I usually juts keep a bit my bank ready for it but i usually earn half of what I will this year, they must be a better way to prepare. 

keep it simple and put the money into an instant savings account.  you won't get a great deal of interest in the current environment but it is better than nothing, and then you won't be in the position of looking around for money to pay your tax bill when it comes along.

TBagpuss

Yes, an instant access savings account or a cash ISA if you don't already have one, would both work. 
As others have said, you don't pay tax on the savings themselves, only on the interest you earn on the savings, which with current interest rates is likely to be minimal