UK Tax Payments For IM

21 replies
Hey guys,

I make a full time living now from my IM activities.

I sell my own ebook and video tutorial set.

I'm sure I need to pay taxes.

I am thinking of going travelling.

What's the best way to go about the taxes?

Any books you can point me in the right direction of?

Any good accountants?

As I'm gonna be gone 6 months out of the year in the future (4-hour work week baby) would it be better for me to set a business up off shore?

At the moment I am a sole trader.

Lots of questions I know, your help is hugely appreciated though.

Any good books, good accountants, good solutions you can point me in the direction of will be hugely appreciated.

Cheers my dears!

:-)
#payments #tax
  • Profile picture of the author The Web Baron
    Hey there,

    I hope this doesn't come across as a "cop out" reply because I genuinely mean what I'm about to say here, I hope it can help.

    If you are able to show invoices or proof somehow of your sales to an account IF NECESSARY (i.e. only if asked) and you keep your income clearly on your bank statements, you do not need to spend any money whatsoever on accountants or tax lawyers. In fact, the time you would need to spend is minimal and the effort equally so.

    HMRC has basically adopted a "do it yourself" tax filing service online these days to encourage people to submit their tax returns online. The bonus for you is, of course, that they "take you at your word" for it. Basically, you tell them honestly how much tax you owe them, and they tell you exactly how much you need to pay on the spot, with no fuss, and no fees.

    As long as you can back up your income IF you're chosen to be audited randomly (very unlikely but possible), it's a pain free process that costs not a penny to you and can probably be learnt in a few hours if not less. The deadlines to file your tax return online are also later - for example, I need to file my tax return up to the end of the tax year April 2010...by January 2011!

    You can check out more of the details from the HMRC tax page here - basically, as long as you're officially registered self-employed and paying your national insurance (neither of which are tax related but still have to be done, which is easy), you can do it yourself in a jiffy!

    Hope I've helped
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  • Profile picture of the author Martin Avis
    You need an accountant.

    Failing to report your income will get you into no end of trouble - and worse, failing to keep back a proportion of your income to pay the taxes you owe will get you into serious mire.

    Get an accountant right away.

    Martin
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  • Profile picture of the author mcmcmcmc5
    Cheers guys.

    What about the off-shore thing?

    Could I save on taxes by going that route?

    And how would I go about doing that?
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    • Profile picture of the author butters
      Originally Posted by mcmcmcmc5 View Post

      Cheers guys.

      What about the off-shore thing?

      Could I save on taxes by going that route?

      And how would I go about doing that?
      That's called tax evasion... You can try but in the end your get caught, just pay your taxes, don't try be smart, do it the way most other people do it.
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      • Profile picture of the author mcmcmcmc5
        Thankyou very much for the advice guys - it is hugely apreciated.

        I will forget the offshore thing for the time being, and go the self assessed route.

        As my turnover increases I will then get an accountant.

        Once again, thanks guys, this whole forum is amazing.
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        • Profile picture of the author butters
          Originally Posted by mcmcmcmc5 View Post

          I will forget the offshore thing for the time being
          Just want to pick up on this and say... Forget about it period, not for the time being.
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      • Profile picture of the author LetsGoViral
        Originally Posted by butters View Post

        That's called tax evasion... You can try but in the end your get caught, just pay your taxes, don't try be smart, do it the way most other people do it.
        It's tax evasion only when it's illegal. If you can bypass taxes with legal means, go for it!
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        Time of thinking is over.
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        • Profile picture of the author mcmcmcmc5
          Hi LetsGoViral,

          Do you have info/experience with this yourself?

          Info is always apreciated!
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    • Profile picture of the author KarlWarren
      Originally Posted by article_ghostwriter View Post

      If you are already making a full-time living from IM, then you must have paid taxes on your earnings already. Are you registered as self-employed?
      Not necessarily, it could be that this year's earnings have allowed the OP to go full time - therefore, those taxes will be paid later on.

      To the OP, don't seek or take tax advice from a group of public people who have no vested interest in your business. An accountant will sit with you and discuss your needs, usually for free (for half an hour).

      If you don't get an accountant, don't expect to be protected against fees of defending yourself if you are audited - accountants can provide that indemnity for you.
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      • Profile picture of the author Mark Bradley
        I used to work on a cruise liner and at that time (13 years ago) if you worked outside the UK for 9 months or more you were not liable to pay income tax in the UK.That may have changed - you need to do your due dilligence.

        I would definitely advise seeking the services of a reputable accountant.
        Not only will they keep you right with the taxes you owe they can also save you money i.e. you can claim a rebate on your business expenses - broadband,computer equipment etc.

        Revenue and Customs isn't the type of organisation you want to get on the wrong side of,as some have found to their cost.

        Hope it all goes well for you,enjoy your travels.

        Kind regards,

        Mark.
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  • Profile picture of the author Rich Lowe
    Hi,

    I absolutely agree with what Martin advised.

    Forget the off shore thing. They have clamped down on it. I have already had long discussions with my accountant about it.

    Thanks

    Rich
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  • Profile picture of the author Steve Peters Benn
    Hey guys,

    I make a full time living now from my IM activities.
    Don't be a chump - pay your taxes, don't try and dodge them - forget the offshore thing. Get a decent accountant and look at how your business is structured...
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  • Profile picture of the author sloanjim
    Man ????? Are you serious?

    "You think you haveto pay taxesss..." No kidding you do.

    Offshore = JAIL TIME... It's a bit like asking "if i rob a bank will I be ok?"

    sure as long as you do not get caught.

    See an accountant...but do not ask him what you have asked here I fear he may do an injury laughing :-)
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    • Profile picture of the author butters
      Originally Posted by sloanjim View Post

      It's a bit like asking "if i rob a bank will I be ok?"
      Personally I think you should be ok, they robbed us, we are just taking back what was ours .
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    • Profile picture of the author inter123
      If you don't pay the taxes, one thing that is almost certain is they will catch up with you further down the line. I have discovered, now, its better to be organised, know what is required and sort out the taxes from the word go.

      You certainly don't want to be in a position of owing tonnes of money which you may not have at that moment further down the line.

      The tax people are actually quite helpful, all they want is what is owed. Generally if you are co-operative, they are like-wise.
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  • Profile picture of the author Russell Turner
    Personally I will only use an accountant if I am sure that he / she will save me at least his or her fee in taxes, otherwise I will fill out my tax return myself online.

    Things might be up in the air tax wise until the emergency budget in the U.K. but saying that, some of the things implemented might not be brought into effect until next April.

    If I were you I would phone HMRC and get them to send you the latest tax handbook and speak to someone about your situation.

    If you become a non domicile then you will only be allowed to spend a certain number of days per tax year residing in the U.K, but to make this worth while I would imagine you would want to be based in Switzerland, Monaco for example which may cost a lot of money per year to maintain, in which case it would probably be worth keeping your base in the U.K.

    Do you own your place or rent? A friend of mine who went traveling had a nightmare time suspending his council tax payments and had to empty his place of his possessions and pile all of his furniture up in one room before they accepted he was going away. Telephone / broadband services are another PITA factor.

    Good luck mate.
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    • Profile picture of the author mcmcmcmc5
      Hey guys, just to verify.

      By offshore - I certainly did not mean bunking taxes.

      I know that taxes need to be paid, I'm just finding the best way to do it.

      By offshore I meant (in my very limited knowledge of such matters) setting up a limited liability company abroad as the main company through which my transactions make place.

      I'm gonna go self assessed to begin with, then ask get my free half hours with some accountants and get their advice on where to go from here.

      In fact, first job for tomorrow: Call HMRC

      Thanks again for all your input - this forum really is a testimony to human kindness.

      TTFN!
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  • Profile picture of the author mcmcmcmc5
    Hey guys - thanks again for the help.

    Just to let you know, I've just registered as self employed with the HRMC.

    I'm on my way to calling round some accountants as we speak.

    Cheers!
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