It is true that with everything in life, that if you do not pay careful attention, it will get the better of you. The same applies to handling Tax. Without proper systems in place you will find tax, taxing. Below, we discuss what you need to do to ensure that Tax IS NOT TAXING.
Guidelines to go by:
Declare everything that is earned. Yes you can be paid in cash but include it in your sales for your tax return. If HM Revenue and Customs find out that you have not declared income on which tax is due, you may be charged interest and penalties on top of any tax bill, and in more serious cases there is even a risk of prosecution and imprisonment.
Do not buy work. Your talent and abilities should be enough for you to get work with giving anyone a ‘back hander’. I have people whose work is so good that they work for royalty.
Keep receipts for all business expenses especially where goods are bought online and you do not get a paper receipt. Print it off as the tax you pay is dependent on knowing what you have spent to take off of what you have earned. You must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. HM Revenue and Customs ( HMRC ) may check your records to make sure you’re paying the right amount of tax.
Be aware of your own worth, yes someone else may be cheaper but would they be as good as you? It is very easy to sell yourself too cheaply as you think you would be getting the work that way.
Be aware of the time restrictions as HMRC are all too ready to issue fines for late returns or incorrect returns. And charge interest on top. You’ll get a penalty if you need to send a tax return and you miss the deadline for submitting it or paying your bill. You’ll pay a late filing penalty of £100 if your tax return is up to 3 months late. You’ll have to pay more if it’s later, or if you pay your tax bill late. You’ll be charged interest on late payments.
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Give away 10% from what you earn and this is an economic law that always works for you will never have any lack.