| Question for freelancers re tax returns and NI contributions etc 11:06 - Mar 19 with 572 views | ThisIsMyUsername |
How do you generally budget for your annual tax and NI payment, specifically if you don't actually know in advance how much you are going to be earning?
I've recently started making money as a freelancer in the last few weeks. I am not at all sure whether in my first 12 months I am even likely to meet the threshold for payments.
I've not yet registered as self-employed with the HMRC but I understand I could do this up until this October. Again, I may or may not have hit the £1,000 threshold before 5th April to even need to register yet.
Thanks in advance for any tips. |  |
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| Question for freelancers re tax returns and NI contributions etc on 11:17 - Mar 19 with 514 views | bluefunk |
The simple way is to set aside 30% of everything you receive to cover any potential tax bill in your first year. Remember you have to pay the bill by the end of January following the end of the tax year, so for example, this years bill has to be paid by January 2024. Don’t forget that you can offset business expenses, so that brings down your taxable income Also, in future, you will have to make payments on account based on your current years income, which in turn reduces the need to save 30% of your income - simple eh! |  | | |
| Question for freelancers re tax returns and NI contributions etc on 11:19 - Mar 19 with 512 views | Keno |
As funky says try and set 30% of your income aside
and maybe speak to an accountant about what you can, and cant, use to offset your tax bill |  |
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| Question for freelancers re tax returns and NI contributions etc on 11:28 - Mar 19 with 496 views | ThisIsMyUsername |
Thanks both! I did assume it would be a simple case of setting the money aside somewhere, but it's good to know that I am not missing anything else too obvious (hopefully). | |
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| Question for freelancers re tax returns and NI contributions etc on 11:31 - Mar 19 with 485 views | bluefunk |
| Question for freelancers re tax returns and NI contributions etc on 11:28 - Mar 19 by ThisIsMyUsername |
Thanks both! I did assume it would be a simple case of setting the money aside somewhere, but it's good to know that I am not missing anything else too obvious (hopefully). |
Take Kenos advice re an accountant, especially if you start earning significant amounts | | | |
| Question for freelancers re tax returns and NI contributions etc on 11:37 - Mar 19 with 472 views | Grumpy_Old_Man |
Speak with an accountant about setting yourself up as a limited company.
Benefits include: should you fall in to debt the company is liable not your personal assets,
pay yourself by dividends, first £2000 tax free, after that lower taxes.
Pay pension contributions through the businesss.
Good luck for your future. |  | | |
| Question for freelancers re tax returns and NI contributions etc on 13:09 - Mar 19 with 390 views | ThisIsMyUsername |
| Question for freelancers re tax returns and NI contributions etc on 11:37 - Mar 19 by Grumpy_Old_Man |
Speak with an accountant about setting yourself up as a limited company.
Benefits include: should you fall in to debt the company is liable not your personal assets,
pay yourself by dividends, first £2000 tax free, after that lower taxes.
Pay pension contributions through the businesss.
Good luck for your future. |
Thank you. | |
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