Income Tax Returns

[Octopus]

"That'll be class 4 not class 2. Class 2 are voluntary, class 4 are income based (8%) of TAXABLE income which occurs AFTER allowances (£7400 ish) and deductibles (car/ van, tools etc)."



Sort of right. Its 8% of nett profit on everthing over £7400 (ish)

 

[VoltzElectrical]

"That'll be class 4 not class 2. Class 2 are voluntary, class 4 are income based (8%) of TAXABLE income which occurs AFTER allowances (£7400 ish) and deductibles (car/ van, tools etc)."



Sort of right. Its 8% of nett profit on everthing over £7400 (ish)

Isn't that the same thing? Surely Net profit is what would deemed to be taxable income, ie what you earn after allowances and tax deductible costs?

 

[the pict]

I use a tax software thingy I just keep adding things to it till it says " you have no tax to pay" only kidding but there are some great accountacy software packs out there for lot less that the 500 brick your paying an accountant, make sure it a HMRC approved product though
Pict

 

[telectrix]

i had one orf those software packages frfom the bank. about as much use as a fart in a thunderstorm. tried it out and it took 50 times longer to enter anything than it did with pen and accounts book ( simplex D)

 

[Richard Burns]

I set up an excel spreadsheet that once I put on sales costs and purchases does a running total of tax due (if any) and state of the business (bad). This gives me all the numbers I need to supply to the tax man at year end (well that's the idea anyway)
The HMRC are actually there to help and they do give quite good advice, I generally look at the business-link pages and get the main idea for allowances etc.and then try and wade through the reams of strange information on the HMRC site.

 

[oldtimer]

That'll be class 4 not class 2. Class 2 are voluntary, class 4 are income based (8%) of TAXABLE income which occurs AFTER allowances (£7400 ish) and deductibles (car/ van, tools etc).

Yep apologies I have the figures as you mentioned on my spread sheet I should have checked the correct ammount before I went to press

 

[oldtimer]

i had one orf those software packages frfom the bank. about as much use as a fart in a thunderstorm. tried it out and it took 50 times longer to enter anything than it did with pen and accounts book ( simplex D)

I spent a tenner on a spreadsheet accounts from diy accounting I use 3 spread sheets and because I am a sole trader I zero the VAT part spread sheets are
Sales this records my milage and sales plus itemises my work A for independant and B for letting agent this tells me at a glance where my income is coming from it also give me a running total.
Purchases This records and itemises all purchases ie materials telephone stationary
Banking does what it says on the tin

I just use the same spreadsheets from year to year I have also made up a running total spreadsheet that I fill in every month also I fill these sheets in every day and place all receipts in a folder and they are all in order for easy reference I also back them up every other week to a memory stick as after working with PCs for 26 years I still do not trust them

 

[JL_Electrical]

If you do a fair few jobs as a CIS subcontractor and then a fair few as a "main contractor" ie no CIS. Then with the right accountant you should be a fairly happy man come January. Mine is worth his weight in gold

 

[piggyitm]

You need to pay tax up front (CIS) to be able to claim anything back.If your all invoices, you'll just be adding another £500 receipt to your collection.