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© Welsh Assembly Government 2006
Tax. No one likes dealing with it. But it’s one of life’s unavoidable tasks. HM Revenue & Customs (HMRC) has done a lot to make the process easier. We answer some of your questions…
I’m self employed. What’s my situation?
Whether you operate as a sole trader or a partnership, you have to pay income tax and Class 2 and/or Class 4 National Insurance. You pay income tax and Class 4 National insurance by filling in a self-assessment form.
How do I fill in the self-assessment form?
You can do it online at www.hmrc.gov.uk/sa/ where there’s also a Welsh version, or by filling in the paper form that’s sent to you at the end of the tax year, which falls on 5 April.
Do I have to calculate my own tax?
Only if you choose to. Otherwise HMRC can do it for you.
When do I have to get my tax return back?
By 30 September if you want HMRC to calculate tax for you; by 31 January if you do it yourself. Miss the January deadline and you’ll be fined £100.
What if I don’t agree with the tax calculation?
You can appeal.
When do I pay tax?
You pay it in two instalments: the first at the end of January, the second at the end of July. If you are late, you will have to pay interest.
I have a limited company. What’s my tax situation?
Even if you are a director of a limited company, you are an employee and will pay income tax and Class 1 National Insurance. Your company may have to pay corporation tax too.
When do I need to register for VAT?
When your turnover is more than £61,000 a year (2006).
Where can I get help?
The HMRC website (www.hmrc.gov.uk) or if you’ve just started up in business call 0845 915 4514. Otherwise find a good book-keeper or accountant, but bear in mind they can be expensive.
· Don’t avoid dealing with tax – it will catch up with you eventually
· Get your tax return in on time to avoid the penalty
· If you are self-employed put money aside regularly to pay your tax bill
· Keep receipts – some business expenses can be off-set against income, reducing your tax bill
· Keep careful records of all income and expenditure, see our article Basic book-keeping
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becauseyoucan is a programme delivered by the Welsh Assembly Government’s Department for Enterprise, Innovation and Networks, and is part financed by the European Union |
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