Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: gavin pedley on September 20, 2010, 08:36:06 pm
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I have read a few posts on here about tax etc.
What i would like to know though is what is recommended to put aside each month for tax?
I have read somewhere that it is 20% if so should i then be putting aside 20% of what ever i earn each month?
I want to make sure when a bill finally comes i am not up sh*t creak!
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20% of your turn over each month, as this should give you enough to pay what they ask for, plus if any thing left nice little bonus
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Thanks so i did read right then. i will start doing that from now on thanks Darren
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what a lot do is say sod it and spend it, when bill arrives think the tax man will give them time to pay, he doesnt as u should already have it
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Yes i was just reading a post on here to that effect. i am most defiantly not going to be that stupid. I want to know i have enough saved to pay it as soon as it comes in and not have to worry.
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If it's your first year watch out. You'll pay tax at the end of the year plus tax for half of the following year. Payment on account they call it.
also your ni contributions will seem amazingly low after coming out of employment. At the end of the tax year you will also have to pay a percentage of your earnings in additional ni contributions.
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i put 20% away every month of anything i earn so im covered and not scrambling about for it like squeaky does!!
just do it automatically and you ll have no problems.
regards
dazmond
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I've got a direct debit set up with the tax man and put aside extra for any difference. Accountant sorted it out with the tax man on my behalf.
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i put 25% of my weekly earnings nice little bonus at end of year
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Lets say you started in April last year and earnt £20,000 you will had your first year end in end March 2010.
lets say you owe £3000. This will be submitted and will be due end Jan 2011 plus half again. So total will be £4500 in Jan 2011 and £1500 July 2011.
If you started this year your first payment will be Jan 2012.
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Do most of you do your own return or do you get an accountant to do it for you??
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If it's your first year watch out. You'll pay tax at the end of the year plus tax for half of the following year. Payment on account they call it.
also your ni contributions will seem amazingly low after coming out of employment. At the end of the tax year you will also have to pay a percentage of your earnings in additional ni contributions.
So i will need to put more away than 20% then?
For NI what if i am still in a PAYE job as well as this self employment?
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Gav, do you find it a bit of a minefield mate??
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if your on PAYE and self employed at same tiem then u shoudl get a self assessment and go see an accountant,
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Yeah that's what I've done.
;D
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Gav, do you find it a bit of a minefield mate??
A little yes but i think i have got my head around most of it roughly. Just soaking up as much info as poss so i am not in the sh*t down the line.
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You are/ we are all paid in large amounts of cash. We are all Human with Human nature. Put aside 28 per cent of what you intend to to declare. Any other advice is p.
20 per cent direct tax after expenses and 8 per cent class 4 national insurance at 8 per cent of you profit.
You can earn approx £6.500 per year before any tax is due. So don't count the first £6.500.
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Yeah I'm much the same Gav. I'm sure in time the penny will drop ;D
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You are/ we are all paid in large amounts of cash. We are all Human with Human nature. Put aside 28 per cent of what you intend to to declare. Any other advice is p.
20 per cent direct tax after expenses and 8 per cent class 4 national insurance at 8 per cent of you profit.
You can earn approx £6.500 per year before any tax is due. So don't count the first £6.500.
http://www.hmrc.gov.uk/rates/it.htm
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so what does everyone agree on 20%, 25%, or 28%?
my opinion is 25%
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I reckon 20% of total turnover should cover it OK for most people even with the (8%?) NI + £2+ per week NI. You get the first £6k or so tax free. You get your business expenses knocked off too before calculating profits. Of course if you want a nice sum left over after paying, by all means put 28% aside if you can afford to do so. It's quite possible to cover it with less than 20% put aside if your business expenditure has been on the high side.
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so what does everyone agree on 20%, 25%, or 28%?
my opinion is 25%
I would say 20% is enough myself.
This assumes that you are not going to hit a higher tax bracket and that your business expenses are around an average level. If you scrimp every penny on expenses, maybe 22% to make sure.
This percentage is of TOTAL turnover BTW.
I would get away with 20% myself because I imagine my expenses are higher than average for a sole trader (spread out round, rent a small unit, on a water meter, invest in better equipment if affordable etc etc).
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become limited and take directors salary allowance( about 5k) then do the rest as shareholder dividends. make sure all expenses are in there. just an idea.
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If it's your first year watch out. You'll pay tax at the end of the year plus tax for half of the following year. Payment on account they call it.
also your ni contributions will seem amazingly low after coming out of employment. At the end of the tax year you will also have to pay a percentage of your earnings in additional ni contributions.
So i will need to put more away than 20% then?
For NI what if i am still in a PAYE job as well as this self employment?
If you are on PAYE you will need to put away the full 28% as all of your turnover minus expenses will be tax deductable. This includes NI class 4
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Why not just submit your tax return asap after April and then you will presumably get a figure you need to pay, Then have until end January to pay it? Is this correct?
I have just got my 2009/2010 stuff off accountant (gave them to him about June, So bit slow IMO), Looks like I will be getting money back, not paying any this year!!