19 {{ upvoteCount | shortNum }}
19 {{ upvoteCount | shortNum }}

Paying taxes in UK, need help

by high_plains_drifter
16 replies
Over the last few months i have started to earn a small amount of money from my websites. Im trying to find out how i go about filing for tax for these earnings but like everyone, i am very confused.

I work part time for a company and take home approx £700 after NI + Tax deductions.

On my days off i work on my sites. I have managed to build my earnings up to around £300 per month (from adsense)

I also receive about £100 per month from CPA and small jobs here and there via PayPal.

I do not transfer my PayPal earnings into my bank account, i just simply use the paypal funds to pay for my monthly outgoings (link building, hosting etc)

Currently i dont actually make any profit because everything i earn goes straight back into my sites, but i know this is still classified as an income so i have to pay tax on it.

Can anyone point me to some articles/resources/online accountant services that can help me out.

I want to get this sorted out sooner rather than later and each day that goes by it lays on my mind more and more.
#paying #taxes
  • Profile picture of the author CDarklock
    Originally Posted by high_plains_drifter View Post

    Im trying to find out how i go about filing for tax for these earnings but like everyone, i am very confused.
    Employed and self-employed tax and National Insurance : Directgov - Money, tax and benefits
    Signature
    "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
    {{ DiscussionBoard.errors[4880845].message }}
    • Profile picture of the author high_plains_drifter
      Originally Posted by CDarklock View Post

      and so my brain starts to hurt......

      thanks for the link, its all very confusing
      Signature
      {{ DiscussionBoard.errors[4880875].message }}
      • Profile picture of the author CDarklock
        Originally Posted by high_plains_drifter View Post

        its all very confusing
        Not really. There are three main points, which I've pulled out of the page and quoted here.
        • If you work as an employee you pay any Income Tax and Class 1 National Insurance contributions due through PAYE (Pay As You Earn). Your employer deducts these from your pay before you get it.
        • If you have any income from self-employment it's your responsibility to pay any Income Tax and National Insurance contributions due. Depending on how much you earn from self-employment you may have to pay Class 2 and Class 4 National Insurance contributions.
        • If you expect to be both employed and self-employed you may be able to 'defer' some of your Class 2 and/or Class 4 National Insurance contributions. You'll pay what's due after the end of the tax year when the actual amount has been worked out. Doing this will make sure you don't pay too much National Insurance on your self-employment income.
        Details about all three are at the link. It's not difficult. Just take a deep breath and read slowly.
        Signature
        "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
        {{ DiscussionBoard.errors[4880941].message }}
        • Profile picture of the author high_plains_drifter
          Originally Posted by CDarklock View Post

          Not really. There are three main points, which I've pulled out of the page and quoted here.
          • If you work as an employee you pay any Income Tax and Class 1 National Insurance contributions due through PAYE (Pay As You Earn). Your employer deducts these from your pay before you get it.
          • If you have any income from self-employment it's your responsibility to pay any Income Tax and National Insurance contributions due. Depending on how much you earn from self-employment you may have to pay Class 2 and Class 4 National Insurance contributions.
          • If you expect to be both employed and self-employed you may be able to 'defer' some of your Class 2 and/or Class 4 National Insurance contributions. You'll pay what's due after the end of the tax year when the actual amount has been worked out. Doing this will make sure you don't pay too much National Insurance on your self-employment income.
          Details about all three are at the link. It's not difficult. Just take a deep breath and read slowly.
          yes but there are so many questions left unanswered

          How and when is payment taken - say if i make 500 one month and 100 the other month??

          Do sort submit it at the end of the year and then pay it all??

          Can i claim expenses so that i dont have to pay tax on earnings that i use to buy things such as servers, link building etc
          Signature
          {{ DiscussionBoard.errors[4880977].message }}
          • Profile picture of the author CDarklock
            Originally Posted by high_plains_drifter View Post

            yes but there are so many questions left unanswered
            Not on that website. They are only unanswered here in this thread on the Warrior Forum, which is not a forum about how to pay mixed employment and self-employment taxes in the UK.

            I am not qualified to lead you by the hand through this process, and I would get into legal trouble if I tried. You need to either self-help on the website, or go write a cheque to someone qualified if you can't be arsed.

            Running your own business requires initiative and effort. If you've not got any, perhaps this is not for you.
            Signature
            "The Golden Town is the Golden Town no longer. They have sold their pillars for brass and their temples for money, they have made coins out of their golden doors. It is become a dark town full of trouble, there is no ease in its streets, beauty has left it and the old songs are gone." - Lord Dunsany, The Messengers
            {{ DiscussionBoard.errors[4881030].message }}
          • Profile picture of the author Janet Sawyer
            Originally Posted by high_plains_drifter View Post

            Can i claim expenses so that i dont have to pay tax on earnings that i use to buy things such as servers, link building etc
            Yes, you can claim any expenses for business purposes against your profits.

            "Tax doesn't have to be Taxing!" - nice article on this blog here Tax doesn't have to be taxing that might help you out.

            Of course the best advice is to get an Accountant.
            Signature
            {{ DiscussionBoard.errors[4881041].message }}
  • Profile picture of the author Karen Connell
    It would be beneficial to spend a few pounds for an hour with an accountant.

    Some accountants will allow the first hour consultation free. You will then be able to decide if you need to use him to deal with your self-employed earnings.

    It is far better to pay someone to deal with the Inland Revenue on your behalf than try and navigate the minefield yourself.

    Think of it as an investment in your business.
    Signature

    Never Mistake Activity for Accomplishment

    {{ DiscussionBoard.errors[4881059].message }}
    • Profile picture of the author high_plains_drifter
      Originally Posted by Janet Sawyer View Post

      Yes, you can claim any expenses for business purposes against your profits.

      "Tax doesn't have to be Taxing!" - nice article on this blog here Tax doesn't have to be taxing that might help you out.

      Of course the best advice is to get an Accountant.
      thanks, ill be sure to give it a read

      Originally Posted by Karen Connell View Post

      It would be beneficial to spend a few pounds for an hour with an accountant.

      Some accountants will allow the first hour consultation free. You will then be able to decide if you need to use him to deal with your self-employed earnings.

      It is far better to pay someone to deal with the Inland Revenue on your behalf than try and navigate the minefield yourself.

      Think of it as an investment in your business.
      yes i would like that, are there online services that can offer this sort of thing. Perhaps just a chat online with an accountant to answer a few of my questions and see how it all works to hire an accountant.

      I would rather pay someone to deal with the whole process.

      If im in the position to consider paying someone to do it for me now when im just earning £400 per month then ill definitely want to pay someone in a years time when ill likely be earning £1000+ per month. Might as well just save myself the bother like you say and find someone now
      Signature
      {{ DiscussionBoard.errors[4881106].message }}
    • Profile picture of the author Tony Marriott
      Listen to CD,

      (BTW I am NOT a tax consultant! I just do my taxes)
      It really is not that hard.

      To complete your tax online you will need to sign up and get a government gateway ID and then register to complete your self-assement form.

      It can take a couple of weeks for each as they send you pins etc in the post. So allow an extra month if doing online returns.

      Online returned must be in by January for the previous tax year (april).
      Paper retuns are due end of this month so you are probably too late already.

      The online self assessment couldn't be easier because it is interactive. Just answer each question and it will ask you to complete the next. If it needs more info, it asks you. When you have finished , it tells you.

      Don't need to ask questions because it is all explained as you go along.

      Fill in the the self assessment which will need your previous P60 details.
      One part of the self assesment form is self employment earning. This will mean you fill in another form specifically for that, Again interactive.

      In fact with earning of less than £70k (which seems likely from your quoted figures) you don't even have to itemize your expenses.

      Just get on the site and follow the instructions.

      Any tax/NI due they will tell you. They will also tell you when and how you can pay.
      That is likely to be different depending on your situation and status so no-one can really answer that for you.

      My only advice is that you do it. The one man you do not want coming after you is the tax man. Their reach is full and final.

      If you have any tax questions - ask the HMRC
      Signature
      {{ DiscussionBoard.errors[4881140].message }}
      • Profile picture of the author high_plains_drifter
        Originally Posted by Chri5123 View Post

        I know how you feel man!

        Simple answer:

        Get an accountant!

        If you can't afford one then ring up the HMRC and they will tell you what you need to do.

        Honestly a good accountant is invaluable - just wait until you go LTD like I did and that really does mess with your head...

        Dividends - with me it was just Divi....what....?

        Finally got in the end with a lot of coffee and a big accountants bill to boot lol!

        Chris
        hehe yes, i think its a good idea in the long run. Just dont know where to look for a decent accountant

        Originally Posted by Tony Marriott View Post

        Listen to CD,

        (BTW I am NOT a tax consultant! I just do my taxes)
        It really is not that hard.

        To complete your tax online you will need to sign up and get a government gateway ID and then register to complete your self-assement form.

        It can take a couple of weeks for each as they send you pins etc in the post. So allow an extra month if doing online returns.

        Online returned must be in by January for the previous tax year (april).
        Paper retuns are due end of this month so you are probably too late already.

        The online self assessment couldn't be easier because it is interactive. Just answer each question and it will ask you to complete the next. If it needs more info, it asks you. When you have finished , it tells you.

        Don't need to ask questions because it is all explained as you go along.

        Fill in the the self assessment which will need your previous P60 details.
        One part of the self assesment form is self employment earning. This will mean you fill in another form specifically for that, Again interactive.

        In fact with earning of less than £70k (which seems likely from your quoted figures) you don't even have to itemize your expenses.

        Just get on the site and follow the instructions.

        Any tax/NI due they will tell you. They will also tell you when and how you can pay.
        That is likely to be different depending on your situation and status so no-one can really answer that for you.

        My only advice is that you do it. The one man you do not want coming after you is the tax man. Their reach is full and final.

        If you have any tax questions - ask the HMRC
        im going to register myself now as self employed an see how it goes. Im already stuck on the first form though

        I have been traveling Asia for the last 2 years 4 months, during this time i started earning approx £100 per month.

        Its only recently since coming back to UK have i put more effort and money into IM to create new sites have i actually started to make some more profit.

        So for the question -

        When did you start working for yourself?
        Would i put xx/2009 or 06/2011
        Signature
        {{ DiscussionBoard.errors[4881206].message }}
  • Profile picture of the author rosetrees
    Contact your local branch of Business Link - they'll tell you what you need to know.
    {{ DiscussionBoard.errors[4881082].message }}
  • Profile picture of the author Chri5123
    I know how you feel man!

    Simple answer:

    Get an accountant!

    If you can't afford one then ring up the HMRC and they will tell you what you need to do.

    Honestly a good accountant is invaluable - just wait until you go LTD like I did and that really does mess with your head...

    Dividends - with me it was just Divi....what....?

    Finally got in the end with a lot of coffee and a big accountants bill to boot lol!

    Chris
    {{ DiscussionBoard.errors[4881115].message }}
  • Profile picture of the author John Henderson
    HPD,

    I've called HMRC a number of times to clarify stuff and -- contrary to their popular image -- they aren't a bunch of grumpy, officious busy-bodies; they're actually really helpful and supportive.

    If you were to call them and explain your situation, they'll most likely tell you over the phone how it all works and then send you booklets with all the info that you need to know. Easy peasy.
    {{ DiscussionBoard.errors[4881619].message }}
  • Profile picture of the author spearce000
    Best to hire an accountant, but also invest in some good book-keeping software like Sage to keep a record of your income and outgoings. You'll then need to file a tax return each year and pay tax and NI on your profits.

    Ask around locally for a good accountant, or failing that, look in the Yellow Pages.
    {{ DiscussionBoard.errors[4885403].message }}
  • Profile picture of the author melleni
    Get yourself an accountant is the best advice but one thing you need to remember is if you register too late they make you pay a penalty
    {{ DiscussionBoard.errors[4886404].message }}
  • Profile picture of the author Richard Tunnah
    Originally Posted by high_plains_drifter View Post

    Over the last few months i have started to earn a small amount of money from my websites. Im trying to find out how i go about filing for tax for these earnings but like everyone, i am very confused.

    I work part time for a company and take home approx £700 after NI + Tax deductions.

    On my days off i work on my sites. I have managed to build my earnings up to around £300 per month (from adsense)

    I also receive about £100 per month from CPA and small jobs here and there via PayPal.

    I do not transfer my PayPal earnings into my bank account, i just simply use the paypal funds to pay for my monthly outgoings (link building, hosting etc)

    Currently i dont actually make any profit because everything i earn goes straight back into my sites, but i know this is still classified as an income so i have to pay tax on it.

    Can anyone point me to some articles/resources/online accountant services that can help me out.

    I want to get this sorted out sooner rather than later and each day that goes by it lays on my mind more and more.
    You can get a free intial consultation with a local accountant who will be able to advise you based on your unique circumstances.

    Rich
    {{ DiscussionBoard.errors[4886448].message }}

Trending Topics