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Taxes in the UK..? Advice..

Discussion in 'BlackHat Lounge' started by Leith, Mar 2, 2012.

  1. Leith

    Leith Jr. Executive VIP Jr. VIP Premium Member

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    So, Im looking for some advice or help from UK members here making some earnings through IM.

    The current personal allowance in the UK is £8,105 / year for 2012/13.

    I believe that if you earn over that amount in the year, you need to pay taxes of course.

    I've signed up as self employed (working online doing IM). I had a chat with the guy at the centre and he told me that each year I will get a form or application from them and I need to send it back with how much I have made in the year, and then they will send me back a bill, only if I have gone over the allowance and also how much Il need to pay in tax.

    My questions:

    1) How much do they deduct from the final amount? Is it 10%?

    2) Is it really this simple? They send form. I send back how much I've made and that's it? Or do we send proof on how much we've made and so on?

    Any advice/tips appreciated.
     
  2. MaxWeber

    MaxWeber Regular Member

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    pm sent
     
  3. Leith

    Leith Jr. Executive VIP Jr. VIP Premium Member

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    Got it, would love to chat to you on Skype.

    Any other tips or info from others?
     
  4. forlearnx

    forlearnx Regular Member

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    I haven't needed to do a self assessment yet, but for corporation tax that is the basic procedure. I pass everything to my accountant, they fill in the form and send it off to hm revenue. You only need invoices/paperwork if the tax office requires it. But I'm told you need to keep all financial paperwork for 6 years.

    If you are only paid 8k, a tax credit maybe available to you.

    You should check out some accounting forums or get financial advice from qualified people.
     
  5. ogeee

    ogeee Registered Member

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    I'd check out businesslink's website if I were you. They'll tell you exactly what you need to do for being self employed, plus you can ring them and get extra advice if you need it.

    It's daunting when you're not used to it, or despise filling in forms (like I do), but it isn't actually that hard.
     
  6. blasterpro

    blasterpro Registered Member

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    Best advice is to get an accountant let them do the work they will save you more money than you pay them. My mate did it himself for the time he was self employed, the tax man came saying he owed more then he reported and he had to sell his car the over the arrears. Trust me get an accountant save yourself the hassle...
     
  7. Leith

    Leith Jr. Executive VIP Jr. VIP Premium Member

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    Yeah, I don't mind filling out the forms or anything - but it just sounds kinda too simple so wanted clarification.

    Thanks anyway!
     
  8. islandman1010

    islandman1010 Elite Member

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    They will send you a sself assessment form and you have several boxes etc to fill in. If you return this form before the end of September for the tex year that finished in April they will calculate how much you owe. If you want to calculate how much you owe you must send it in by the following January with your calculations and payment (if you made a profit)

    You will pay 20% tax and around 10% national insurance on the amount you made between the £8,000 and around £40,000. If you made more than the higher limit you will pay tax on that higher amount at 40%.

    You can deduct from your income anything that is vital to run the business. Any new computers, electricity, hosting fees and various other things can also be claimed for if the business cannot run without them. Income minus expenditure gives you your profit figure.

    Also you will need to buy a self employed national insurance stamp monthly.

    Cant remember the exact tax brackets but I think I am close. The HMRC website hads the exact figurs.
     
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  9. Leith

    Leith Jr. Executive VIP Jr. VIP Premium Member

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    Thanks for a detailed answer. I must say - taxes are fucking complicated! Any other advice is appreciated as usual..
     
  10. fuserleer

    fuserleer BANNED BANNED

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    Set up a LTD.

    Push all money to that, become a director, you can then pull up to 36k a year without paying any tax. Add your wife, spouse as a director, they can pull 36k too. No NI to pay either and you can push "expenses" through that are tax free, register for VAT and claim back VAT on pretty much anything you buy. WIN WIN!

    Thats the basic principle :)
     
  11. florflor

    florflor Senior Member

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    Depends. If you're not making huge amounts (like me), just do your own self-assessment return electronically.

    If you're making bank, you should have a Ltd company and an accountant.
     
  12. jammie

    jammie Jr. VIP Jr. VIP Premium Member

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    If you're registered as a business (LTD) and earning over the tax free limit i'd say hire an accountant for £500.

    Sounds like a lot but someone who knows their stuff will make you more money than they cost you =]

    Mainly it's done by deducting expenses and over depreciating assets (computers etc.) but if you don't know the game it can't be costly.

    If you pay this, you can usually work through what they've done and do it yourself next time anyway, but it's tricky.

    To be honest - if you're working from home just deduct rent/mortgage from your income and you'll be under the tax limit anyway (most probably!) so you won't have to pay any tax in this case, but the rules are quite complicated. All of the info is on the HMRC website though!
     
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  13. Talsin

    Talsin Regular Member

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    You cant just get away with deducting rent/mortgage, the allowance for that kind of thing is really small (i.e. if you're working out of a home office - full time - you shouldn't be claiming much more than 4 quid a week for that).

    Now a Ltd company who happens to invest in a property is a different story, but for those kind of games you need an accountant.
     
  14. Leith

    Leith Jr. Executive VIP Jr. VIP Premium Member

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    Thanks guys for your support!

    Any more is appreciated..
     
  15. jammie

    jammie Jr. VIP Jr. VIP Premium Member

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  16. Cbrauer

    Cbrauer Newbie

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    In the U.S you can claim up to 10% of all home utilities and rent/mortgage if you have an office you use more than 30 hours a week.
     
  17. vegas23

    vegas23 Regular Member

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    The tax situation also varies depending on if IM is your only job or is part time and you have another income. If you have another income then LTD is good as you might end up going over the tax limits and ending up on 40% tax.

    Like fuserleer says, LTD is the way to go if you are making a decent amount. You'll pay around 20% tax on PROFIT then you can pay yourself in dividends tax free.

    Then you have justifiable business expenses...Petrol @ 40p a mile for visiting clients, any kind of stationary or hardware purchases, mobile bills, internet bills etc.

    Get your wife/partner listed as a director, and if she earns less than you then give her a higher proportion of shares, she can then take more out of the business without worrying about going over tax limits.

    You can get incorporated for about £50 on the internet or do it yourself for around £20.

    The books can be tricky though so I'd advise an accountant unless you are good with numbers...and make sure you submit books on time and pay on time, and don't fiddle it!