HMRC's Electricians Tax Safe Plan - Help!

[sparky_72]

Help! :sad_smile:I've just been told about the Electrician's Tax Safe Plan.... Has anybody else heard about this? Do you think it is worth taking part? HM Revenue & Customs: Electricians' Tax Safe Plan campaign

 

[lurch]

if you have not declared your earnings and are investigated, then you could be in a pickle. are you saying you are in this position?

 

[oldtimer]

Do you keep proper accounts that they can audit then great but if you are living the life of someone who earns £65k but declare £35 well they aint stupid you are.

 

[sparky_72]

if you have not declared your earnings and are investigated, then you could be in a pickle. are you saying you are in this position?

I do keep all of my invoices etc but I have done some cash-in-hand jobs for friends and friends on the family which have been 'off the record'.

I am worried that this will be traceable and I don't know if the ETSP would be beneficial for me to enter as I don't have any written evidence, contracts or invoices for the 'mates rates' jobs I have done.

 

[lurch]

have you registered these jobs?

 

[sparky_72]

No I havent

 

[lurch]

then you gotta ask yerself if the jobs are traceable. then you gotta ask yourself why are you doing notifiable jobs without notifying them !!

 

[cbw]

I think if its just a couple of mates rates jobs its not masses of money, they are after the serial offenders!

Learn from it, it sounds your like me and worry too much.

I have put all cash jobs through the books as I would stress tooooo much!

 

[oldtimer]

I dont know if anybody has noticed but HMRC are advertising this policy on this web site so they know where we hide

 

[cbw]

Ah that will be google targeted advertising, I have not seen the ad.

There obviously homming in on you!!!!!!!!!!!!!!!!!!!!

 

[Adam W]

I've just opened a letter about this; apparently they will be gathering information from sources such as "online and press advertising, trade directories, industry bodies, part P certificates and trade suppliers".... Maybe even this forum...

I don't do 'private jobs' and I pay the tax they ask for every year so to speak so I won't be taking part, but if you've been doing rewires cash in hand every weekend it'll probably hit the fan if they catch you out.

 

[sparky_72]

I think if its just a couple of mates rates jobs its not masses of money, they are after the serial offenders!

Learn from it, it sounds your like me and worry too much.

I have put all cash jobs through the books as I would stress tooooo much!

I have, I won't be doing it again, as you said I worry to much.

The money didn't amount to too much and as said only a couple of time. It definitely won't be getting done without passing through the books next time. I've learnt from my mistake.

 

[oldtimer]

I've just opened a letter about this; apparently they will be gathering information from sources such as "online and press advertising, trade directories, industry bodies, part P certificates and trade suppliers".... Maybe even this forum...

I don't do 'private jobs' and I pay the tax they ask for every year so to speak so I won't be taking part, but if you've been doing rewires cash in hand every weekend it'll probably hit the fan if they catch you out.

Adam I totally agree its just not worth it I quoted a customer £120 to upgrade 3036 fuses to circuit breakers he handed me 6 £20,s with a big smile on his face I said do you have internet banking and he said no why ? and I said saves time standing in line in the bank he said but here is the cash anyway I think he was hoping for me to hand back £20 the thing is I made £75 so the tax was £17 plus I dont have a high turnover so it was not worth the hassle.

Another point I would raise is a change of behaviour with customers the majority of mine are young professional who want small jobs done at a time that suits them plus they dont carry money and if they do the have about £15 in their pocket and they all want to pay via internet banking which suits me no standing in line in the bank

 

[Guest111]

I was once in a lets say discussion with a tax man years ago re cash jobs,which i didn,t do and he asked me "if your in your local pub and the landlord asked you to change a couple of lamps for him would you?" so i said yes he,s a mate so he says "what about payment what would you charge?" so i said i wouldn,t but probably get given a pint,to which tax man replys"ah we could have you for tax fraud as technically the value of the pint is undisclosed earnings" apparently if you have not declared earnings then that is classed as tax fraud, whereas if you try to avoid paying the correct amount of tax on what you earn thats tax evasion,only the first one carries a prison sentence, I discovered this after going through hell a few years ago then after the event finding out a relative was high up in hmrc who happily explained all to me,sadly too late to save me all the stress.

 

[sparky_72]

Thanks - the explanation of the difference between tax fraud and tax evasion will help. I am shocked they would deem the pint being undelcared income - I would have thought that the cost was too low to be taxed anyway - but still. That is like saying if some-one helped a friend to move home or paint their house (and it wasn't their trade) that it should be declared for tax if their friend gives them a thank you gesture - ridiculous!

 

[oldtimer]

Remember in the tax world there is no such thing as "too low to be taxed" because if there was then instead of a customer paying you £1000 they could pay you 200 times at £5 because say someone set the too low to be taxed threshold to a £5 plus it woild not be us they would have a problem with it would be with some smart a%$%% accountant who would try to get around it I remember 30 years ago when a company got away with paying their staff a bonus with gold sovereigns saying they had a face value of sixpence or 2.5p in new money the revenue argued that it was the actual gold value or its worth and anyway althogh technically the revenue is not going to chase you for helping your mate move house when he buys you a couple of pints and a curry they are just making sure there is no loopholes for someone to use it on an industrial scale.

 

[egginyourface]

If you want to do well in the game of life and move up you gotta pay tax

Thats how the game goes

Cash or cheque it all goes through the books...

 

[oldtimer]

I agree because the majority pay by electronic banking it is just not worth it

 

[electromonkey]

It's a strange one this. If you consider how many redundancies are being made in the public sector, you wouldn't think they'd have the resources to be sifting through what would be a phenomenal amount of paperwork to say for example cross reference a spark's accounts with electrical works that they have notified to their LABC.

The best and easiest advice an accountant has given me in relation to tax is this. Every month, the first £500 profit I make is mine. Any profit after that, 1 third is for the tax man.

In my very first year of trading, I used an accountant. That accountant managed to cock up my books and a friend of mine's too along with plenty of others. He got struck off from one of the financial bodies as a result but it didn't stop HMRC from writing to me asking for more money!

 

[DurhamSparky]

received my paperwork, binned it

 

[oldtimer]

It's a strange one this. If you consider how many redundancies are being made in the public sector, you wouldn't think they'd have the resources to be sifting through what would be a phenomenal amount of paperwork to say for example cross reference a spark's accounts with electrical works that they have notified to their LABC.

The best and easiest advice an accountant has given me in relation to tax is this. Every month, the first £500 profit I make is mine. Any profit after that, 1 third is for the tax man.

In my very first year of trading, I used an accountant. That accountant managed to cock up my books and a friend of mine's too along with plenty of others. He got struck off from one of the financial bodies as a result but it didn't stop HMRC from writing to me asking for more money!

As sole trader who is not VAT registered I do my own books it is not hard to I complete a daily spreadsheet(s) then at the end of the month transfer it over to a spreadsheet that tells me how much tax and NI I have to pay.Plus you are spot on about putting aside a third which is fine if you have self discipline if not then you will constantly chase your tale as you tend to borrow your tax reserve.

It not complicated ie if you have a tax code of say 720L then you can earn £7200 before tax or £600 a month so if you made £1600 profit in a month then put aside 35% of £1000 = £350 and then get on with your life and at the end of the year you have a little left over after you have paid the bill . Anyway it works for me and as I have said before its not worth it

 

[electromonkey]

I do my own accounts too. Like you said, It isn't difficult.

There's a trade off between having an accountant who you will need to pay but who will find ways of getting you to pay less tax and paying more tax but not paying an accountant. Either way, you end up paying out!

 

[oldtimer]

I do my own accounts too. Like you said, It isn't difficult.

There's a trade off between having an accountant who you will need to pay but who will find ways of getting you to pay less tax and paying more tax but not paying an accountant. Either way, you end up paying out!

I would also add that when I employed an accountant years ago he would not tell me his bill until he seen my accounts or in other words he was shaking me down and he sorted it out in 30 minutes because I did all the work for him so you are correct it is a trade off and I would rather pay £100 extra on tax than pay him £600.

Also a bit advice for anybody running a business if you have a professional approuch to your business then do the same with your accounts ie keep a folder put all your receipts in chronological order make a simple spread sheet(s) that you can fill in daily ie Purchase,Bank,Sales,Milage
and then a monthly total sheet that calculates your running tax bill. Plus never trust a PC as far as yiou can throw it so every 2 week back up your accounts files and every month your business files onto a memory stick. So at the end of the tax year in a couple of weeks time you just fill in the boxes or you could...................................

Leave your receipts lying around the dash or floor of your van then dig through a drawer in the house for bank statements then get fed up chuck them all in a box hand them over to an accountant who will hand them to a bookeeper who will have to sort them out and then charge you £800 plus vat for doing it. Plus this will not help HMRC if they decide to audit you hiding behind "I am a very disorganised person" will not wash instead they will say well we are and here is a £2000 tax bill and £1000 fine for not being so.

 

[moggy1968]

it's not a question of wether you break the rules or not. Even if you play exactly by the book an investigation is a nightmare. 1-2 days of your time plus additional accountancy fees, and they will find something if only to justify their existance!
There is, I think, an element of scaremongering in this, a bluff to get people to 'fess up with just enough investigations to keep people on their toes.
I have heard they target certain accountants customers if possible problems look likely (i.e. if your returns are regularly late)

 

[Guest111]

I was told they target small businesses as they either can,t afford or don,t know how to fight it,say a large multinational owes 2 million in tax it could cost HMRC as much to recover it ,dont forget accountants costs are business expenses! So if they chase enough small businesses they still get their 2 million back no hassle and they are happy.