Question / Discussion Paying tax

rich110991

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Hi guys just looking for some info on paying tax please.

Since April (start of the new tax year) I’ve had self employed income and in the first few months I had some personal income as well from jobs I had which I already paid tax on. I think I’m right that I just have to say this is how much self employed income I’ve made and this is how much personal income I’ve made and they will deduct the personal off?

My questions though are.. I know you can earn £12,500 without being taxed. But is that the self employed and personal combined? Or just the self employed income?

And my second question is if you go a bit over £12,500... do you get taxed on the whole amount, for example £15,000... or would you just get taxed 20% of the £2,500 that you went over??

Thanks for any help.
 

Jon

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Hi guys just looking for some info on paying tax please.

Since April (start of the new tax year) I’ve had self employed income and in the first few months I had some personal income as well from jobs I had which I already paid tax on. I think I’m right that I just have to say this is how much self employed income I’ve made and this is how much personal income I’ve made and they will deduct the personal off?

My questions though are.. I know you can earn £12,500 without being taxed. But is that the self employed and personal combined? Or just the self employed income?

And my second question is if you go a bit over £12,500... do you get taxed on the whole amount, for example £15,000... or would you just get taxed 20% of the £2,500 that you went over??

Thanks for any help.
It’s combined and yes you only get taxed on the amount OVER the £12,500 threshold
 

rich110991

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It’s combined and yes you only get taxed on the amount OVER the £12,500 threshold

Oh that’s such a relief! Thanks Jon. Is it January I will have to pay it?
 

rich110991

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Declare 2020/2021 from April 2021 and then pay it before January 2022

Oh, I don’t know why I had January in my head.

I’m at £12,500 now (combined).. £1,500 is personal income what I’ve already paid tax on though.
 

Jon

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Oh, I don’t know why I had January in my head.

I’m at £12,500 now (combined).. £1,500 is personal income what I’ve already paid tax on though.
When you fill in your set assement it will ask if you have an employer AND if you are self employed

first you fill in the employed section with data from your p60 and then you move onto the self employed section and put your figures in there.It will combine it all and then tell you if you owe any tax / national insurance and when you need to pay it by.

it’s all a lot easier than people think!
 

rich110991

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When you fill in your set assement it will ask if you have an employer AND if you are self employed

first you fill in the employed section with data from your p60 and then you move onto the self employed section and put your figures in there.It will combine it all and then tell you if you owe any tax / national insurance and when you need to pay it by.

it’s all a lot easier than people think!

I have a P60 from when I worked for Mecca Bingo but I don’t think I have one for the agency work I did at Pertemps..
 

rich110991

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I’m a bit stressed that I haven’t recorded any expenses!!

All the paper, envelopes, etc that I’ve bought and I’m not sure about all of the postage whether I should have been keeping receipts for that and claiming that back too...
 

Jon

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I’m a bit stressed that I haven’t recorded any expenses!!

All the paper, envelopes, etc that I’ve bought and I’m not sure about all of the postage whether I should have been keeping receipts for that and claiming that back too...
Like I’ve said in the past I would look at using something like FreeAgent which can clock your expenses for you as they are paid for via your bank account / PayPal account so it’s all automated, not to mention PayPal / Etsy fees as well
 

rich110991

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Like I’ve said in the past I would look at using something like FreeAgent which can clock your expenses for you as they are paid for via your bank account / PayPal account so it’s all automated, not to mention PayPal / Etsy fees as well

I can find the Etsy and PayPal fees though. Should I be keeping the postage receipts though too? Is that something you can claim on?
 

Jon

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I can find the Etsy and PayPal fees though. Should I be keeping the postage receipts though too? Is that something you can claim on?
I don’t know how esty works but if you sell an item for £20 and you have to pay to package the item that packaging is an expense
 

Sherliarty

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With self-employment you can either claim a blanket £1000 allowance for expenses or provide an overall expenses number. I use the blanket allowance as I don't have too many expenses. Are your customers paying for delivery? If not then yes you can claim postage as an expense. The same applies to packaging, is it charged to the customer or not.

Your printer, ink, paper, frames etc should be charged to expenses though I think.
 
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rich110991

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With self-employment you can either claim a blanket £1000 allowance for expenses or provide an overall expenses number. I use the blanket allowance as I don't have too many expenses. Are your customers paying for delivery? If not then yes you can claim postage as an expense. The same applies to packaging, is it charged to the customer or not.

Your printer, ink, paper, frames etc should be charged to expenses though I think.

There’s a lot to keep track of :/
 

rich110991

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Are they going to ask me to prove any of these expenses?

Say if I’ve sold 500 pictures then I know that’s at least £500 in postage (it’s more) ... but I don’t have the receipts?
 

Sherliarty

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This is the question!! I don't know anyone who has ever been asked to prove their expenses but it doesn't mean it won't happen. The HMRC can call you in for an audit but we are small fry so it is unlikely. I would start keeping your receipts in a folder or box plus keep a spreadsheet or written record. Once this is set up, it won't seem a faff. I think you are meant to keep records for five years.

I'm assuming you are offering free delivery? Sadly you will have to estimate your cost but assuming the pictures are largely the same then it should be relatively easy to work it out plus the receipts you get now will probably be reasonable enough evidence of past costs. Don't worry too much about this, just do your best to estimate.
 

Jon

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Are they going to ask me to prove any of these expenses?

Say if I’ve sold 500 pictures then I know that’s at least £500 in postage (it’s more) ... but I don’t have the receipts?
They could do yes if you are claiming them as an expense
 

rich110991

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Thanks for your help.

It’s made me feel better.

I’m thinking as long as I don’t lie and just give my best estimate, they won’t lock me up! Touch wood.
 
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nat21luv

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Hmm I wouldnt declare something that I cant prove. If you dont have the postage receipts, or anyway of tracking them, then no, don’t declare it as an expense.

For future reference, everything you use to aid your business is a business expense. My phone, iPad, fuel, office furniture, stationary, £6pw utility expense, staff biscuits.... the list goes on. This is why business people are so wealthy- their Chanel suits are “uniform”, the Rolls is chauffeur driven work vehicle. The loopholes are everywhere!
 

Jon

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Hmm I wouldnt declare something that I cant prove. If you dont have the postage receipts, or anyway of tracking them, then no, don’t declare it as an expense.

For future reference, everything you use to aid your business is a business expense. My phone, iPad, fuel, office furniture, stationary, £6pw utility expense, staff biscuits.... the list goes on. This is why business people are so wealthy- their Chanel suits are “uniform”, the Rolls is chauffeur driven work vehicle. The loopholes are everywhere!
True true
Time for this image again

 

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