Tax Related Topics

[friendly accountant]

Seventh useful post..

As a very rough rule of thumb... your tax bill will be approximately 30% of your profit for that week. (20% tax, 9% NI) - 30% is easier to calculate that 29% so lets keep it simple!

In reality (assuming not a 40% tax payer) it will be less than the 30% but we likes simples

[friendly accountant]

Eighth useful post..

Be very careful what you take as the truth from people who claim to know what they are talking about when it comes to accounts and tax. There are a lot of educated fools out there that THINK they know what they are talking about but they haven't actually got a damn clue.

I have seen crap advice given by laymen on various forums and it just makes me cringe. Some of it is wrong that it becomes bordering on the edge of Tax Evasion!!!!

After having got 3 professional accountancy qualifications then I consider (and so does my institute) that the advice I give will be correct.

Talk to an expert.... it pays off in the end.

[friendly accountant]

Ninth useful post..

If you are in the (un)/fortunate position that you have to make payments on account each sixth months in respect of income tax; did you know that you can reduce these payments?

Doesn't affect the total tax payable, but can make a major difference to your personal cashflow.

It's all a question of timing again

[friendly accountant]

Tenth useful post..

If you are considering making a big expenditure at the start of the tax year, why not do it a week earlier and get tax relief a year quicker?

Again - it's all about timing!

[admin]

Great information, if my accountant ever gets sick of me I will be sure to give your office a call.

[friendly accountant]

Just a reminder for those that need it... Your tax return for the 2011/12 tax year must be filed online by 31st January 2013 and any tax paid by the same date.

Don't forget as HMRC send out automatic fines if you are late.

Struggling or need a helping hand... Feel free to contact me via xxxtax.com

(And just to show that not all accountants are humbugs, mention this post upon contact and you get a seasonal reduction in fees).

[friendly accountant]

Eleventh useful post...

Even if you are not earning above the tax free personal allowance a year (currently £8,105) then you MUST still complete a self assessement tax return. It doesn't mean you have to pay tax, bit HMRC still want a completed tax return - it's the law. I have talked to a few students and part time cammers over the last year who were unaware of this fact.

Get in the system and you don't have to worry about that dreaded knock on the door.

[This is not a blatant push at attracting new customers as I have actually been known to help a couple of people on here who weren't earning lots of money and just wanted a bit of advice when it came to completing the tax return. I was happy to give general advice over the phone as long as it was on the understanding that it could not be relied upon as they weren't a fee paying client (usual legal stuff that professionals are forced to stipulate etc). All I asked was that they bung a couple of gold coins into the local air ambulance charity box when they saw one next.]

[friendly accountant]

Twelfth useful post....

If your income is nearing the VAT threshold limit, then some people may consider the possibility of setting up a Ltd Co and putting some of their business through that instead of reporting it as a sole trader. This avoiding the need to compulsory register for VAT.

Although a Ltd Co is a seperate legal entity from it's owners - HMRC can actually consider it to be one and the same in cases where they deem that a Ltd Co has been created to avoid VAT. They call it artificial seperation and will look at things like common control, advertising, funding, business etc.

If in doubt, ask first rather than just go ahead and do it.... HMRC know this happens and they are well and truly aware of it.

HMRC are not daft!

[curlytots]

Hello,

A wee question, when it comes to NI contributions, I was looking on the HMRC website, and it breaks it down into a weekly basis.

if you earn between £107 and £146 you’re automatically covered for State Pension and benefits
12% on your weekly earnings between £146 and £817
2% on any weekly earnings over £817

What I want to ask is - do you break these earnings down as an average over the whole yearly weeks? i.e. Say you earned £45k, but some weeks you earned £1200, others maybe 650 etc. (So this would affect the percentages). Or do you say, well, 45k is divided by 52 (weeks in the year), so then your profits would be £865.38 on average?

Otherwise, it could end up being a totally different figure?

Sorry in advance if I'm not being clear!

EDIT: Or would it be a different figure?! Maths have never been my strong point, I'm a humanities girl... *shakes head*

xx

[friendly accountant]

Hello,

A wee question, when it comes to NI contributions, I was looking on the HMRC website, and it breaks it down into a weekly basis.

if you earn between £107 and £146 you’re automatically covered for State Pension and benefits
12% on your weekly earnings between £146 and £817
2% on any weekly earnings over £817

What I want to ask is - do you break these earnings down as an average over the whole yearly weeks? i.e. Say you earned £45k, but some weeks you earned £1200, others maybe 650 etc. (So this would affect the percentages). Or do you say, well, 45k is divided by 52 (weeks in the year), so then your profits would be £865.38 on average?

Otherwise, it could end up being a totally different figure?

Sorry in advance if I'm not being clear!

EDIT: Or would it be a different figure?! Maths have never been my strong point, I'm a humanities girl... *shakes head*

xx

You need to look at Class 2 and Class 4 rates.

Class 2 is paid weekly, irrespective of profits.. class 4 is annual profits based.