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Tip off the Self-Assessment - Unitof1 - 25th January 2008
For the first year of self employment I never got out of the Short Form tax return which you fill in if you do not go over a threshold of earnings. Between 2005-2008 the limit was payments up to £15000, for 2007-2008 it apparently is going to be £30000. For those who do not know the Short form is the normal tax form but only three figures are required to be filled in -basically total of money you were paid, total of your expenses and a final figure of profit generated from taking expenses from payments. The main difference to the full form is that the expenses are not categorised. When I was on the Short Form I got into a habit of stuffing my receipts and invoice copies into A4 plastic pocket paper holder folder book monthly and then filling out a monthly-categorised account. Then one day I cracked the threshold and when I came to fill in the long form I found that my categories were slightly different from those required by the taxman and then had to redo my itemisation (I had car, tools, banks and other). Anyway here is my sados tip. Find out what the taxpersons categories are for the year ahead, which you can do by downloading the full assessment form off the web, itemise your receipts into those categories and then if you find that you have any categories that you donât understand you can have a lovely chat with your taxperson about whether trips to museums in Italy are legitimate expenses. I would suggest using these categories even if you donât think that you will reach the threshold- to get into the habit but also because it will help anyone to understand the why, what and how you are trying to make any money.
One of the things you soon learn is regret on paying tax! I donât mean that you should seek avoidance but that any tax that you pay could potentially have been an investment in yourself and if you look at the legitimate categories I think that it helps concentrate the mind on what you can do. What can you do in âInterest and finance paymentsâ, âAdvertising, promotion and entertainmentâ - should you have bought a metal detector, dynamite, got a CSCS cardâ¦.
Example of form which you can cut and paste into excel (might not last)
http://www.diyaccounting.co.uk/Selfemployed/selfassessment.htm
or pdf form at
http://www.hmrc.gov.uk/forms/sa103.pdf
As for the yearly tax cycle I blame Stonehenge but now I know what is meant by ritual.
Tip off the Self-Assessment - BAJR Host - 25th January 2008
nice tips!
"No job worth doing was ever done on time or under budget.."
Khufu
Tip off the Self-Assessment - Unitof1 - 28th May 2008
Whats the expense that you were most surprised to have accepted by the tax authorities or is that a commercial secret?.
Tip off the Self-Assessment - Unitof1 - 1st June 2008
So for instance you were invited to tender for a contract
what expense should you consider?