Paying the dreaded taxman?

[pjtiler]

Should call badger pj you always come out late at night

i have to wait till the nurse has her tea break

 

[sWe]

:lol::lol::lol:

sWe - no offence mate, I'm sure you mean well but YOU should try calling one of our tax offices. I'm not kidding - they employ absolute idiots/morons/imbeciles.

One "conversation" with one of our (many and varied) tax offices, and you'll soon see one of the reasons why the UK is in the mess it is! It has to be the most overly-complicated system in the whole world. Grumps will probably disagree but then he isn't human - he's a robot and enjoys all that stuff.

In the past 10 years, I must have spent at least one month on the phone to one form or other of the Inland Revenue, normally about their huge miscalculations on my company car tax (when I was in sales).

"...computer says no!" :mad2:

Well... The system over here isn't exactly easy to navigate either, but the Swedish tax administration does a fairly good job at providing info, and they hold free courses for people who either want to extended their knowledge of the red tape, or who want to start their own business, and so on. Helps enormously. The Swedish unemployment agency does the same (you don't have to be out of work to attend these courses), and there's a ****load of organizations who promote entrepreneurship, and hold courses on pretty much anything you could want or need to know about running businesses and dealing with the authorities.
That said, it's still an f-ing web of red tape, and it's very easy to get trapped. And the rules are merciless. If you're one day overdue with your tax payments, they'll send the collectors at you.

If it is as bad as you describe... Aren't there any books around? Can't you hire an accountant or something, or visit a tax consultant?

 

[grumpygrouter]

Alrite guys just wondering if anyone can tell me how much i need to deduct from my income every month for the taxman?

Cheers
Dean

Basically Dean, your tax bill is calculated on you "profit for tax purposes" and is not usually the same as your bottom line profit because you need to make adjsutments for the likes of capital allowances.

Once you have this "profit for tax purposes" you then take off your single persons tax allowance which is currently £5435. From the balance you will need to deduct roughly 28% for tax and class 4 national insurance contributions. In addition to this you should also be paying class 2 national insurance contributions of about £2.40 per week taken by direct debit.

Bear in mind that once you have settled into the self assessment system, you will be required to make "payments on account" twice a year, in January and July.

 

[Dean_T]

Hello grumpy mate ive only been up and running for nearly four weeks now will i still need to make payments in july?

Cheers
Dean

 

[grumpygrouter]

Hello grumpy mate ive only been up and running for nearly four weeks now will i still need to make payments in july?

Cheers
Dean

No mate. I assume you have registered with HMRC as self employed? If so you will receive a tax return next April. Once you have fileed that, you will then need to pay the first years bill by Jan 31st 2010 PLUS half again in advance (1st payment on account).

Sounds a long way away, but if you ferret money away in something like an ISA in prep for this it will save a lot of worry!

Your accountant or tax adviser will tell you how much you will need to pay when you have your tax return done.

If you do subby work, this will take care of some of your tax bill as it is deducted at source before you get your money.

 

[bigneil]

if my memory serves me you dont make any payment in the first year, after your first year and you have given them your first tax return form then they start deciding how much you owe them and when to pay it SHUDDDER !

 

[grumpygrouter]

if my memory serves me you dont make any payment in the first year, after your first year and you have given them your first tax return form then they start deciding how much you owe them and when to pay it SHUDDDER !

Not the best idea Neil to let the tax man decide how much you owe them. Better to get an accountant or tax adviser to work it out properly. The tax office quite often make mistakes!

You are right in one sense though about paying tax in the first year, but it all depends when your accounting periods fall. Sometimes it is year 2 that doesn't have a tax bill.

 

[bigneil]

yea i do a lot of sub contracting and the tax is automatically deducted for that. keep a note of it and fill it in the appropriate box on your tax return when the time comes. it will greatly reduce your over all tax bill

 

[bigneil]

you sound like you now the system pretty well grumpy, i might be picking your brains in firther detail at some point ... lol

 

[grumpygrouter]

you sound like you now the system pretty well grumpy, i might be picking your brains in firther detail at some point ... lol

I have an accounting business too...........