Clean It Up
UK Window Cleaning Forum => Window Cleaning Forum => Topic started by: ftp on October 07, 2008, 08:43:41 pm
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Just come back from a meeting with my accountant who informs me that in January i have to pay my first big tax bill followed by the double whammy of paying another lump at the end of July - luckily i have funds tucked away to cover this. Would be nice not to pay any at all. >:(
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Its called a payment on account.
It has to be done every july for sole traders.
Enjoy. :P
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o yes
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Just come back from a meeting with my accountant who informs me that in January i have to pay my first big tax bill followed by the double whammy of paying another lump at the end of July - luckily i have funds tucked away to cover this. Would be nice not to pay any at all. >:(
the amount you earn , it'll alot of money
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Its called a payment on account.
It has to be done every july for sole traders.
Enjoy. :P
You have to pay every january and july??
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Only the first time. Then it's just January.
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Yeah, the conning gits had me with that one last year. >:(
I tore a few heads off on the phone about that one. ;D
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Only the first time. Then it's just January.
i pay twice a year
jan and july
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so you dont have too after the first year??
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Ive been self employed for 5 years.
First time I paid the tax owed for the year ie £2500 then they wanted 50% of that again on account £1250 so in jan I paid £3750. Then in july I paid the other £1250.
The next year if my tax was say £2500 again for the period they then took my 2 payments of £1250 = £2500 off which left me with £0 to pay but had a payment on account for the next year of £1250 to be paid in that jan and the another £1250 to be paid in july.
And so on......
Very confusing at first but im with it now.
Dean.
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Only the first time. Then it's just January.
i pay twice a year
jan and july
So do I. I didn't owe anything last January though. I earned OK but that was when the capital allowances for WFP stuff started kicking in. I expect a chunkier bill this year though.
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Yeah, the conning gits had me with that one last year. >:(
I tore a few heads off on the phone about that one. ;D
I have to pay twice a year too; Jan and July; it's called payment on account.
How come you don't?
Just interested!
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Ive done it ever since i went self employed i think there is an amount you can earn before you have to pay on account...it would be nice to know what it was ;) ;)
Marcus...
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I pay monthly direct debit.
So much easier.
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Turn yourself into a limited company and it is all a lot simpler. The tax system for sole-traders is quite archaic in this country and really not suitable for running a business. Most firms could make significant savings if they transferred their existing business into a Ltd company.
Ive done it ever since i went self employed i think there is an amount you can earn before you have to pay on account...it would be nice to know what it was ;) ;)
Marcus...
The limit is £500, as soon as your yearly tax bill exceeds this then you have to start paying on account. Most full-time window cleaners should be exceeding this anyway, otherwise they are just not earning enough to justify their work time (different if you are part-time).
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The limit is £500, as soon as your yearly tax bill exceeds this then you have to start paying on account.
Alex are you sure about that as a couple of window cleaners i know say they only earn 6K after expenses and dont pay on account ??
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Yes positive. You are allowed your personal allowance of about £5800 without any tax so they will only be taxed on the small amount above this, hence their bill will be way below £500 a year.
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If you go Ltd (we have) you can have a nice tax free wage up to 35k a year! (dividend) but that is after you have paid corporation tax! 20% (Small companies’ rate)
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go ltd accountents dont like it but good for you if you are paying heavy tax
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go ltd accountents dont like it but good for you if you are paying heavy tax
Accountants love it because they can charge you more.
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go ltd accountents dont like it but good for you if you are paying heavy tax
Accountants love it because they can charge you more.
what i ment buy dont lik e it it is a lot more paper work for them and they dont like telling you about going limited this is just how i see it anyway
yes they do charge you a lot more
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if you get in touch with your tax office they may get you on a workshop for self assessment. I went on one and it cleared up a load of worries, but they also gave me a flow chart thing that gives you an idea of what you need to put aside each week/month to cover the bill when it hits you.
you put that in a nice safe Icelandic bank account and you have no worries. :o
Niall
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The UK taxman is a grabbing git...here in Holland he is still a grabbing git but for the first 3 yeas on our business we get alot of help with income tax and VAT (BTW) we have also bought a house and the first 4 monthly payments were reduced by 66% as a help for first time buyers.
Then he'll take everything he can....
Cheers
Dave.
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I pay monthly direct debit.
So much easier.
How do you arrange that then - and what happens to any over/underpayment?
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Poleman
Cleanitup God
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Posts: 1808
Re: Double tax - oh joy
« Reply #17 on: Today at 08:35:09am »
If you go Ltd (we have) you can have a nice tax free wage up to 35k a year! (dividend) but that is after you have paid corporation tax! 20% (Small companies’ rate)
How does that work?? you dont pay tax on dividends upto 35k
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If you go Ltd (we have) you can have a nice tax free wage up to 35k a year! (dividend) but that is after you have paid corporation tax! 20% (Small companies’ rate)
tell us more andy
you know me, im a poor window cleaner, i have to make do with putting bits of cardboard in my shoes, i guess unlike you
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I pay monthly direct debit.
So much easier.
How do you arrange that then - and what happens to any over/underpayment?
I think he means standing order; it's easy to set up; phone the tax bloke and find out the sort code and account number and on internet banking set it up; using your UTR as your reference.
Just pay the monthly amount you think you will owe in tax.
I do this; it's great.
If you get too much in credit, you can request for the payment to be made to you.
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I like to hold on to my money until the last possible minute! Why let them have your interest?
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I've just had a look at my standing order to the tax man.
I use the following details:
Sort Code: 10 50 41
Account Number: 23456000
My own UTR (unique tax reference number).
I'm sure it's the same for all of you, but I'd check it out first.
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I like to hold on to my money until the last possible minute! Why let them have your interest?
If you're disciplined, that's great; but if you're not; paying monthly is great also.
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I pay monthly direct debit.
So much easier.
i enquired about this, they said they have no such system.
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I like to hold on to my money until the last possible minute! Why let them have your interest?
If you're disciplined, that's great; but if you're not; paying monthly is great also.
mine gets paid in the last week its due ;) im sure they are not waiting at the computer to check ive paid though ;)
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I pay monthly direct debit.
So much easier.
i enquired about this, they said they have no such system.
Well, in that case I wonder where my money is going. Quite obviously what is happening is you have been asking a dunder-head. They do have that system in place, it is there, you just need to call em a bit more, eventually you'll get the right dept.
Its a Direct Debit, not standing order. I pay what my annual tax-bill is on an annual basis divided into 12 equal monthly amounts.
As for overpayments, I dont pay them that much monthly to allow that to happen ;D Under payment, well, I then owe them what is outstanding.