[samjam]

A friend of mine(mmmmm) has been window cleaning part time for about a year without going down the conventional taxation routes.If he now decides to inform the inland revenue that he wants to start his own window cleaning business,how does he explain not paying tax or NI for the last year and not claiming dole.....

[pdhanson]

Hi Samjam

Naughty boy!  You wouldnt have had to pay tax anyway until about a year and six months after you had started, and even then only if you'd earned over the personal allowance limit (cant remember exactly, but its about £4500)

If you tell them you are starting now, they'll probably ask a few questons about how you have been affording to live.  If you dont have good answers, you might be investigated.  (ALL your financial affairs for the previous 6 years.  They have the power to request your bank statements directly from your bank)

If you just tell the truth, the worst you'll get is a £100 penalty for late notification, and maybe a bill for the NI you mssed (£2 a week) They'll send you a tax return for the year ending april 5 2003, which will have to be in by January 31st 2004.

Personally, I recommend just coming clean.  Apart from any moral question, they are much more likely to initiate a full investigation if you act dodgey, or tell them one thing then another.

Why didnt you tell them when you started? Avoiding tax is not a good idea.  Tax pays for things we all use and need, fire service, police, hospitals, schools.  When people avoid paying, it makes it more expensive for the rest of us.

Silly

[Fox]

I totally agree with Silly Philly on this one.  It is never a good idea to avoid the tax man.

You said it was part time work, Silly is right that you wouldn't pay tax on certain earnings, so you may not have been over the limit, this is usually £4,610 but it does change depending on circumstances.

If working for someone else at the same time then you should have been paying basic rate on all your earnings if you used your tax allowance on first employment.

Yup - only way to do it is to come clean, after all sounds like a serious business is about to be set up, make sure it's all above board.

[paul]

I AGREE YOU SHOULD COME CLEAN THERES ENOUGH COWBOYS WINDOW CLEANERS OUT THERE NOT PAYONG TAX ETC WHICH HURTS AL US LAW ABIDING CITIZENS SO COME CLEAN YOUR FEEL BETTER FOR IT

[g_griffin]

Hi Samjam,  just tell them when you started and they`ll backdate it and let you know what you owe with maybe a penalty. They could find out when you started if they want to.     Gerry.

[matt]

it will only be a 100 quid late fine

As every1 has said above, come clean and pay, otherwise they will catch you in the end, and the fines and interest will soon add up , i know some1 who will be paying his 8 year tax bill for the rest of his working life, the interest on it is rather high  

[samjam]

would i need to register as a business first or would they do it for me.Also would they be asking for proof of earnings? as most of it is done from memory and with a bookI would imagine that not everyone declares all what they earn.Is it up to me to tell them what I earn..Or also,would an accountant do all this for me?

[fez]

You should just tell the truth, there will be no comeback at all. I've checked for you (my mum works for the Inland Revenue!). There's no penalty at all and provided thet you've got all your business receipts, you'll be able to claim for all the equipment that you have bought excluding the gear bought to set up.

Even if you got shopped by a customer, there would be no comeback as long as you then declared what you'd been doing. Big businesses swindle millions out of the Inland Revenue every year, they are not as bothered about small businesses as you may think.

[fez]

it will only be a 100 quid late fine

As every1 has said above, come clean and pay, otherwise they will catch you in the end, and the fines and interest will soon add up , i know some1 who will be paying his 8 year tax bill for the rest of his working life, the interest on it is rather high  

The £100 fine is only for businesses that fail to hand in their self cert forms on time, not for initial, late declarations as in samjam's case.

[samjam]

Thanks for the research...Im still a bit unsure as to what to do first.Either register a new business or inform inland revenue exactly how long ive been working and how much. to be honest id probably be declaring about 100 a week ,i know that tax starts at 89 per week but i want to start paying.Also what happens as my income increases,as im hoping to double my work in the new year coz im only part time at the moment

[fez]

If you check my thread about registering a business name, there's quite a lot of advice about registering.
Here's what I did: Decided on a name, then I opened a business account with a bank using that name so that I can use it for cheques, then I told the tax office about my name change.

When you tell the tax office about your business name, just say that you've been working a while under your own name - i.e. your surname on a (very) part time basis. They'll then help you out with all the ins and outs of running a small business and tell you what you can claim for against your tax, such as clothing allowance and vehicle running costs. You'll be amazed how little (if any) you'll pay in your first year. Next year you'll be able to buy a pure water system instead of paying your tax bill (as I hope to do)!

[samjam]

also wondering if theyll want to recoup NI contributions and tax ive missed for last couple of years.Do you tell them initially how much you are earning or do they leave it to you for the first year?

[pdhanson]

You may find this little leaflet helpful,  its from the inland rev website:

http://www.inlandrevenue.gov.uk/pdfs/pse1.pdf

silly

[matt]

The £100 fine is only for businesses that fail to hand in their self cert forms on time, not for initial, late declarations as in samjam's case.

Correct to a degree, BUT if you dont declare your working SE, you also have a 100 quid payment to make, think its within 3 months of starting

[samjam]

very helpful  cheers.Think im going to have to post date the business start up date a bit.

[matt]

i know the last statement i made is true, as i have just started, well 6 months ago

and i was all keen and forgot tax etc,

WHat i did, was write to the tax office and say this is the second time i have written i am still waiting for a start up pack, they wrote to me and explained i wouldnt have to pay the fine

[scwindowcleaning]

Hi

I started window cleaning 3 wks ago, I do it 3 days a week and work 40 hrs/week in a full time job on the remaining 4 days. I have not yet reqistered with the IR. When I register will I be able to claim the cost of my roof bar, a-frame ladders and other equipment as expenses, or will they be classed as start up costs? I plan to go full time within 2 months, so should I register now as part time earnings, or wait til I quit my job and register as full time?

Thanks
Steve.

[matt]

you wouldhave to work out the costs of the equipment and the tax you would pay, my guess if you have a full time job aswell, you would paya  fair whack in tax

might be worth not telling any1, then use the reciepts as a start-up cost, if its only a few months, this way if the IR ask you why the date is b4 you started, you can expalin you got the equipment and then did canvassing etc and didnt start till you had enough customers

[scwindowcleaning]

What do you use to prove your income? Do you hand over your job book or do you just give an estimation. I use George, will I have to show it to the tax man?

Thanks

[samjam]

thats one of my problems as well.Im sure no window cleaner declares all his work,so what is the best option.

[Fox]

Hi guys

Have you not listened to a word said? Are you so SURE samjam?  

I sub contract to a very reputable window cleaner who is VAT reg'd.  I am SURE he declares ALL of his income.

My income is all declared and I pay the right amount of tax and NI so why shouldn't you.

Not everyone wants to cheat the system - as said earlier it pays for our services.

[shinnyshinner]

Hi samjam
I think your right If every window cleaner came up to you or me and said they have declared everything all through there working life in window cleaning I must say I would think they are talking a load of bull.
I don’t know if big brother is looking on here but I bet you will have more people say they do declare everything but that’s up to them everyone starts some where and I bet main priority is not to the system when people first start.
Alan

[shinnyshinner]

Hi samjam
another thing have you been doing windowcleaning as well as another job where you have been paying tax.
if so with any of your window cleaning you do, have you had to put in a invoice to get your money.
Alan

[pdhanson]

"SURE" no-one declares everything?  Why judge others by your own standards?

Fair's fair, you should pay what you owe (not what you think you can get away with).  

If you get investigated, they may not see all your income going through a bank account, but the main thing they analyse is expenditure.

Believe me, they are on to ALL of the tricks.  It is a myth that because you're paid cash, that's untraceable.  Wrong.  They can find out if they want to, and they have unlimited patience.  They already investigate 1 in 10 tax returns randomly, its no trouble for them to take a look at a slightly suspicious case.

And its our pockets your picking by not paying, because we pay more.

Do the right thing

Silly

[shinnyshinner]

Hi silly philly
I agree with you, you should not think you can get one over the I/R by trying to take them for a ride they are not daft I know people that have had them waiting and following them right through there hole round and would think it would be quite embarrassing when your called in to explain why certain jobs are not on your accounts but I don’t believe that if certain people don’t declare what they do for a second income it will come out of our pocket. We could be getting into the politics now we pay more because of the government spending on different issues is getting out of control.
Who is paying for the many thousands of people coming into this country for example we are not paying more because joke bloggs is not paying into the system. If he was would we all get rebates/lower tax bills?
Alan

[pdhanson]

yes, we would indeed get lower tax bills.

I read that if tax evasion were eradicated then basic rate tax would fall to 17% instead of 22% as it now is.  On someone earning £20,000 that would be a tax bill of about £700 per year less.

As for what the government spends our money on, if you dont agree with them, surely the way to show it is at the polling station, not by comitting a crime.

Silly

[shinnyshinner]

Hi silly philly
You make it sound so easy I am Shaw it is not as easy as that, I don’t think that all what is printed is true.
But lets get one thing straight I pay my taxes and believe me more then enough but I am not going to paint a picture to make myself look something I am not.
If someone out there wants to do a sideline to help him/her self or his/her family out I am not going to stand out on this forum trying to make myself look something I'm not. Good luck to them.
But do fill different about someone signing on and doing it
Alan  

[g_griffin]

I think Samjam wants the answer that HE wants to hear ie. that he shouldn`t pay tax, or as little as possible. I don`t think moralising will change his mind. I pay tax not because it benefits society but because I don`t want to be hit with a huge bill should I get caught out. You could work all your life and not pay a penny but you could also end up with a bill for thousands. 
                         Gerry.

[matt]

This thread is funny really

how many on here will hold there hands up and say, i dont like paying taxs, i try to pay as little as possible,

well i will

i dont like paying tax's, as some of it is spent on layabout assylum seekers who are out to bleed the system dry, while my mother who is over 60, cannot have a council grant to fx the rear wall on her house (lack of funding they say )

I try and pay as little tax as possible, all legit, i will be claiming for my phone, for my car and for my new PC, and all my new equipment, its all legit, i will decalre what i earn, and then i will pay my tax bill

ive said it now

[shinnyshinner]

Hi Matt
I'll second it too.
I too hate paying tax.
The whole system is wrong and won’t be sorted out on a vote every 4 years, if only it was true.
When it comes to self assessments etc I would of thought most companies out there do what they can to pay as little as possible.
Alan

[simonb]

The best option is to use an accountant.
It will cost £300 or so but it will save more than that in tax as they know exactly what can be claimed and have u tried filling out your tax return?
simonb

[shinnyshinner]

Hi simonb
During the year I keep my books up to date then all my books go to my dads and his accountant does both of our accounts together.
Alan

[samjam]

think some of you must have read me wrong.All I was implieing was that window cleaners may have some small income to rely on in winter months and when customers dont pay up.How exactly can you predict a weekly wage under these circumstances?

[zeusjazmin]

tell the tax man you have started!!!!!!!!,do not withold anything.
i was investigated because i was naive,they will look into all bank accounts,credit cards hp payments,absoloutly everything!!!!!!!
you will have to prove to them that you have not been making vast ammounts of money.

[AuRavelling79]

My wife does my books (she's done Bookkeeping, Accounts for Ltd Co's and Accounts software training - pretty bright really - except she married me!) - and she gets paid to do it which is a business expense.

[Colin_Glenn]

It really is worth declaring your earnings correctly. If you earn less than £15,000 you only need to tell them what you made your expenses and your net earnings (earnings minus expenses) if you do it on the internet it is dead easy and you can fill out your return in an evening.
I found out recently that if you are investigated by the IR they also present you with a bill for thier time at the end of the investigation. My friend had a bill for £890 after a random investigation, even though they found NOTHING wrong with his accounts. Fortunatley he had an insurance policy with his accountant which paid that bill. Personaly I think THAT is unfair , if they want to check your accounts then they should pick up the bill if nothing is wrong.

Colin

[Duke]

pah,if it's paid by cheque or account...it goes through the business....if it's cash, it falls in the pocket....there's always the odd foreigner.....

[NBwcs]

That sounds incredible! Why was he being investigated? Was it just a random check and if so has anyone else been landed with a similar bill? If the IR are charging £800 odd quid to carry out an investigation when nothing amiss has happened then it sends out the wrong sort of message to everyone who keeps "honest"accounts.Its enough to encourage anyone to keep a litle extra back for such a rainy day.

[Colin_Glenn]

He's was a mechanic and had his own business. It was just a random check. He said he had to go to his accountants offices to meet with the IR inspectors and they asked him questions about his bank statements, then they took all his accounts away to check. After several weeks his accountant called to say that the IR were happy with his accounts and that when he got the bill from them he was to send it to the accountant and it would be paid by the insurance policy.
He told me that his accounts were quite complicated because he was buying parts for cars and this meant that a lot of money was spent in lots of transactions so perhaps it took a long time to check his accounts. But I still say that if he was up front and honest with anything then it is WRONG that he was sent a big bill, whether the insurance paid it or not. I understand Bungalow-Bill's point of view but I think it is better to pay up front and honestly as a matter of principle. The law seems to be set up for the benefit of the fraudster but there is nothing more valuable than a clean concience.
 
Has anyone else heard of a similar experience?

[mark f]

nope but instead of doing my own accounts and getting my accountant to just check them over and fill in that stupid so called "simplified" form, i will inquire how much it is to get her to do the lot and include insurance cos i cant believe that happened!! . I have a very good friend who is a tax investigator for the big time fraudsters i will be asking him about that.
 If your guilty then fair enough but if your not then they should appologise, not send a whacking great bill. The problem is that the IR works on the presumption we are all on the fiddle, so those of us who arent, are just viewed not as honest but as getting away with it!

[wash & go window cleaners]

Hi all
My advice is (even though im new to this forum) be as honest as you can, get a good accountant, save your receipts and log your earnings. The taxman is mainly looking for the dole boys, the one's that give reputable window cleaners a bad name. I found that going to your local tax office and registering as self-employed is dead easy 2 quid a week for your NI. By the way can I say since I have joined this forum it's full of advice from experienced members. KEEP UP THE GOOD WORK