Self employment - Tax
Discussion
Right, probably a very simple one, but I've always been PAYE. My other half went self employed in September, having been employed before then.. She hasn't yet sorted an accountant, so we need to sort this ourselves for now at least, and she is being told all sorts of different stories about tax returns.
Does she have to submit a tax return by the end of the month? How is best to do the whole self employed tax thing..?
Does she have to submit a tax return by the end of the month? How is best to do the whole self employed tax thing..?
Self assessment works in arrears, so she won't need to do a tax return until after next April for self employment after September last year.
I think I just phoned the tax office when I started working for myself, and they sent me the relevant forms the following April/May. Was a few years ago.
I think I just phoned the tax office when I started working for myself, and they sent me the relevant forms the following April/May. Was a few years ago.
Not got an accountant?
You can see that even understanding what you have to do is not that easy.
She started her self employment in September 2017. Therefore, she started her self employment part way through tax year 2017/18.
Therefore, the first tax year for which she will need to prepare self employed accounts and complete a self assessment tax return is for tax year 2017/18.
The deadlines for submitting a 2017/18 self assessment tax return are -
31 October 2018 if submitting a paper return
31 January 2019 if submitting electronically
Any self assessment tax due for tax year 2017/18 is payable by 31 January 2019
The information that needs to be included on the 2017/18 self assessment tax return would be as follows -
EMPLOYMENT income (and tax paid under PAYE) as per the P45
self employed income from the date of commencement up until 5 April 2018
details of any other income that may have been received in 2017/18, such as interest or dividends or rental income
details of any claims being made for pension contributions or charitable payments under gift aid
Child Benefit amounts received in 2017/18
If she hasn't done so, she should contact HMRC without delay so that they can issue to her a Self Assessment Unique Tax Reference (UTR). She should really have done that by now.
You can see that even understanding what you have to do is not that easy.
She started her self employment in September 2017. Therefore, she started her self employment part way through tax year 2017/18.
Therefore, the first tax year for which she will need to prepare self employed accounts and complete a self assessment tax return is for tax year 2017/18.
The deadlines for submitting a 2017/18 self assessment tax return are -
31 October 2018 if submitting a paper return
31 January 2019 if submitting electronically
Any self assessment tax due for tax year 2017/18 is payable by 31 January 2019
The information that needs to be included on the 2017/18 self assessment tax return would be as follows -
EMPLOYMENT income (and tax paid under PAYE) as per the P45
self employed income from the date of commencement up until 5 April 2018
details of any other income that may have been received in 2017/18, such as interest or dividends or rental income
details of any claims being made for pension contributions or charitable payments under gift aid
Child Benefit amounts received in 2017/18
If she hasn't done so, she should contact HMRC without delay so that they can issue to her a Self Assessment Unique Tax Reference (UTR). She should really have done that by now.
Eric Mc said:
If you are au fait with the UK tax code (all 20,000 pages of it) you should have no trouble with self assessment.
Eric - In fairness, what proportion of the tax code is relevant to the majority of individuals with simple financial arrangements?How many accountants are really au fait with anything but the main / commonly used sections?
Eric Mc said:
I've been dealing with it professionally for 23 years (since it started) and there are still areas that can cause problems for me.
But for many people with simple financial arrangements, an accountant is often unnecessary!Of course if your tax return is very simple then paying an accountant to complete this shouldn’t be too expensive!
Edited by sidicks on Friday 19th January 11:31
Agreed - but for non-accountants not knowing what you don't know can be a serious issue - especially if you DO have some income that is not treated as straightforwardly as you might think.
I've come across a few cases where a person simply left something off a return because
a) they assumed it was something they didn't need to report
or
b) were given duff advice by (say) a financial advisor
I can safely say that the majority of my clients have said something along the lines of "but my affairs are straightforward - aren't they" to me at some point in my relationship with them.
I've come across a few cases where a person simply left something off a return because
a) they assumed it was something they didn't need to report
or
b) were given duff advice by (say) a financial advisor
I can safely say that the majority of my clients have said something along the lines of "but my affairs are straightforward - aren't they" to me at some point in my relationship with them.
Eric Mc said:
Agreed - but for non-accountants not knowing what you don't know can be a serious issue - especially if you DO have some income that is not treated as straightforwardly as you might think.
I've come across a few cases where a person simply left something off a return because
a) they assumed it was something they didn't need to report
or
b) were given duff advice by (say) a financial advisor
I can safely say that the majority of my clients have said something along the lines of "but my affairs are straightforward - aren't they" to me at some point in my relationship with them.
I've come across a few cases where a person simply left something off a return because
a) they assumed it was something they didn't need to report
or
b) were given duff advice by (say) a financial advisor
I can safely say that the majority of my clients have said something along the lines of "but my affairs are straightforward - aren't they" to me at some point in my relationship with them.
To help the OP, what should they expect to pay for the completion of a ‘simple’ return. Presumably it’s at least 2 hours’ work if you include sitting down with the client to understand what their situation is and then completing the forms on that basis?
Eric Mc said:
If you are au fait with the UK tax code (all 20,000 pages of it) you should have no trouble with self assessment.
I've been dealing with it professionally for 23 years (since it started) and there are still areas that can cause problems for me.
Maybe that's because you spend so much time on here Eric. Judging by your post count, I'm surprised you find time to get any work done - over 500 posts per month for nigh on 16 years. Sheesh. I've been dealing with it professionally for 23 years (since it started) and there are still areas that can cause problems for me.
OP, your wife has until 5th October to register for self-assessment. I'd honestly advise you to get an accountant, it will save you money and grief in the long run.
LeighW said:
Eric Mc said:
If you are au fait with the UK tax code (all 20,000 pages of it) you should have no trouble with self assessment.
I've been dealing with it professionally for 23 years (since it started) and there are still areas that can cause problems for me.
Maybe that's because you spend so much time on here Eric. Judging by your post count, I'm surprised you find time to get any work done - over 500 posts per month for nigh on 16 years. Sheesh. I've been dealing with it professionally for 23 years (since it started) and there are still areas that can cause problems for me.
I work additional hours whenever I need to, including weekends. I account for my time on time sheets so I know exactly what it takes and how long it takes for my work and charge accordingly.
To answer Sidick's question, a genuinely simple tax return could be done for around £50 although I would rarely do one for under £100.
I have given tons of FREE advice to PHers, both on the forums and sometimes by having direct contact with the individuals concerned - so please don't lecture me on my work practices..
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