[Pure Glass]

Wonder if you could help guys-really bugging me

We started trading apr 11 and will be due our first tax bill nxt year payable by jan 13.

My worry is how much should I be putting by for tax? I know that my first tax bill wil be 11/12 and nxt 6 months in advance.

Both me and my wife work in the business, so our cut off is 7.5k this year.

This is really worrying me though

Thanks guys

Steve

[Steve_c]

For every £100 you earn, put away £20/30 that should cover it.

[Smudger]

hi - are you and your wife in a business partnership - if so isn't your allowance about 14k? Like Steve £30 per hundred shouldn't see you wrong, you may even have a bit of a fund over

[Pure Glass]

Yeh, we're registered as partnership.

Just scares me a bit as I've always been employed

Should I save 20/30 quid once we hit our allowance, or on everything we've earnt this year?
 
Steve

[Frankybadboy]

everything you earned mate,better to be on safe side.

[NJWindowCleaning]

You could use this site: http--listentothetaxman.com-index.php and you put in married and how much your yearly, Monthly, Weekly or even Daily that you get paid or you have earnt for that period and it will work it out for you and inaddition it is a free site to use...

[edward1]

as above id say save about 1/3 of your money and u should have some left to put asside for your next bill .then it just goes on and on forever .

[RO-Sheen]

Also, something to think about. All of the tools you have bought, van, uniform, advertising, stationary, fuel are all tax deductable as long as you have kept your receipts or proof of purchase. ie All of these costs added together will be deducted from your total sales and you will only be taxed on the remaining balance.
You might even end up with a tax rebate!! 

[Paul Coleman]

Wonder if you could help guys-really bugging me

We started trading apr 11 and will be due our first tax bill nxt year payable by jan 13.

My worry is how much should I be putting by for tax? I know that my first tax bill wil be 11/12 and nxt 6 months in advance.

Both me and my wife work in the business, so our cut off is 7.5k this year.

This is really worrying me though

Thanks guys

Steve

It's likely that you have quite a few startup costs to offset against the tax bill so it might be that you will have a surprisingly small bill.  Remember that even if you are working from a vehicle that you already owned before starting up, you can bring some of its value into the business towards expenses.
My advice to you, and it was the same (good) advice that was given to me.  GET AN ACCOUNTANT !!  As a sole trader with simple accounts I'm paying about £250 a year.  For a partnership it may be more.  You don't need the accountant to be chartered.  The accountancy fee is tax deductible if you are self employed.

[SunShineCleaning]

A a rule I work on the principle that I draw 50% of my turnover as wages.
The remaining 50% stays in the bank for expenses and tax.

DOnt forget that your first Jan payment will be for all your tax plus 50% toward the current year, you pay the other 50% in the July.

Then the following year you pay a balancing payment on any increase in profit plus your payment on account. For a growing business this balancing payment can sting.

My advice is to always get a business account or at least a dedicated personal account.
And never to pay in wages more than 50% of turnover. After 2-3 years the bank balance will be healthy and allow you a bonus or reinvestment.

[SunShineCleaning]

Lets say you turn over £25k first year after expences lets say £20k.

Roughly £6k each before tax

Leaving £8k taxable at what will be about 30% inc class 4

In Jan 2013 your first payment will be £2400 for year 11/12 Plus another 50% for 12/13 so a total of £3600 the other 50% £1200 payable in July

If you only ever turn over the same it will remain about the same.

However if you turn over £3k more your payments will go up to Jan 2014 £1650 plus the balancing payment of £900 total £2550. July 2014 £1650

The pattern continues this way.

The first and subsequent balancing payments need to be looked at closely and saved for.

How much out of your turnover are you saving right now?

[Pure Glass]

I'm turning over around 3k a month, putting away around 600 quid a month at the month

Another question though is that I bought all my equipment in March this year, whilst I was still employed. Is that deductable from 2011/12 tax bill?

I have an accountant but he's a bit poo

[SunShineCleaning]

I'm turning over around 3k a month, putting away around 600 quid a month at the month

Another question though is that I bought all my equipment in March this year, whilst I was still employed. Is that deductable from 2011/12 tax bill?

I have an accountant but he's a bit poo

I think you get a % each year for capital expenses. So yes but not all of it is my guess.

Get a good accountant if you think he is poo!

[SunShineCleaning]

I'm turning over around 3k a month, putting away around 600 quid a month at the month

Another question though is that I bought all my equipment in March this year, whilst I was still employed. Is that deductable from 2011/12 tax bill?

I have an accountant but he's a bit poo

Your £600 a month is about right if you expect £6k expenses a year for the Jan2013 payment of just over £10k

[Paul Coleman]

I'm turning over around 3k a month, putting away around 600 quid a month at the month

Another question though is that I bought all my equipment in March this year, whilst I was still employed. Is that deductable from 2011/12 tax bill?

I have an accountant but he's a bit poo

I think you get a % each year for capital expenses. So yes but not all of it is my guess.

Get a good accountant if you think he is poo!

I don't know the current situation but the rules changed a few years ago allowing you to offset larger items in their first year if you wanted to (cap of £25k).  Presumably you can offset the proportion that most suits you between the old way (25% in first year) and the new way (100% up to £25k).  Indeed, for some start ups it may be essential to offset a much bigger chunk in order to make the payment on account that might otherwise put people off starting a new venture.
This is why I said to get a (non poo) accountant as they should be up to speed with any rule changes as they happen.

[Paul Coleman]

I'm turning over around 3k a month, putting away around 600 quid a month at the month

Another question though is that I bought all my equipment in March this year, whilst I was still employed. Is that deductable from 2011/12 tax bill?

I have an accountant but he's a bit poo

£3k a month after starting in April?  That's some going.  Did you buy some of the work in to help you get started?

[Pure Glass]

Canvassed the lot from scratch

Still some naff stuff to weed out, but I've worked really hard and acheived the sort of t/o I wanted in 3 months, where as I'd planned to do it in 5.

Rewarding myself with a nice 2 wk hol to cornwall which I didn't think I'd get

Thanks for all your help lads-it really has settled the old loaf. Ta

Steve

[Paul Coleman]

Canvassed the lot from scratch

Still some naff stuff to weed out, but I've worked really hard and acheived the sort of t/o I wanted in 3 months, where as I'd planned to do it in 5.

Rewarding myself with a nice 2 wk hol to cornwall which I didn't think I'd get

Thanks for all your help lads-it really has settled the old loaf. Ta

Steve

If you canvassed that lot from scratch since April, you deserve that break.  That really is some going.  I don't have £3k a months worth and I've been at it 20 years (I do take additional income from subbying though).  That's not to say that I couldn't have got more work if I had wanted it.  The work I've given away, dropped/dumped over the years could possibly have made up two bad rounds (which is why I stopped doing them).  It's taken a lot of filtering to have a reasonable round of (mostly) reasonable  customers.

[Ian101]

I'm turning over around 3k a month, putting away around 600 quid a month at the month

Another question though is that I bought all my equipment in March this year, whilst I was still employed. Is that deductable from 2011/12 tax bill?

I have an accountant but he's a bit poo

I think you get a % each year for capital expenses. So yes but not all of it is my guess.

Get a good accountant if you think he is poo!

I don't know the current situation but the rules changed a few years ago allowing you to offset larger items in their first year if you wanted to (cap of £25k).  Presumably you can offset the proportion that most suits you between the old way (25% in first year) and the new way (100% up to £25k).  Indeed, for some start ups it may be essential to offset a much bigger chunk in order to make the payment on account that might otherwise put people off starting a new venture.
This is why I said to get a (non poo) accountant as they should be up to speed with any rule changes as they happen.

This year is the last year u can write big stuff like a van and or system  off in 1 year ... Im hoping for a tax refund for my 1st year as I have a van and system to write off in 1st year  ... worry about next year err next year

[Paul Coleman]

I'm turning over around 3k a month, putting away around 600 quid a month at the month

Another question though is that I bought all my equipment in March this year, whilst I was still employed. Is that deductable from 2011/12 tax bill?

I have an accountant but he's a bit poo

I think you get a % each year for capital expenses. So yes but not all of it is my guess.

Get a good accountant if you think he is poo!

I don't know the current situation but the rules changed a few years ago allowing you to offset larger items in their first year if you wanted to (cap of £25k).  Presumably you can offset the proportion that most suits you between the old way (25% in first year) and the new way (100% up to £25k).  Indeed, for some start ups it may be essential to offset a much bigger chunk in order to make the payment on account that might otherwise put people off starting a new venture.
This is why I said to get a (non poo) accountant as they should be up to speed with any rule changes as they happen.

This year is the last year u can write big stuff like a van and or system  off in 1 year ... Im hoping for a tax refund for my 1st year as I have a van and system to write off in 1st year  ... worry about next year err next year

I didn't realise it was changing.  What a pity.  That will prevent some people starting their own businesses at a time when the economy needs people to get out there and earn.  I was also intending to get another van at some point and try to get a low tax/tax-free year in order to pay down some debt.  Not to worry.  I'm sure I'll find away around it all.