darlodge

Are their any TAX experts out there?

I am currently in full time employment (PAYE) in the low tax band but I have started do some photography work on the side selling to various newspapers and freelance for another photographer.

The additional income will only be around 2-3k pa but I do expect/hope this to grow over the next couple of years. I know I need to speak to IR but I have little faith in what they tell me as they have buggered up my tax code for the last 5 years running!

What should I be doing? It would be nice not to have to pay tax on equipment and to be able to write off expenses like web hosting, business cards, flyers but I do not know if I am getting ahead of my self. Can I justify creating a valid business for 2-3k per year. It does not seem worth it.

All I know is that I do not want to be chased by IR for unpaid taxes.

Ta peeps
Darren

scunnered

iTrader: (1)

Have you thought about becoming a "Limited Company"? You can then claim tax relief on all of your out of pocket expenses. So all your equipment, travel costs, accomodation etc will all add to your taxable allowances, and maybe you might be lucky enough not to pay much tax at all.

I've done it. I've got a weekend job 320 miles from home. I get 40p per mile tax allowance, subsistance allowance (£30/day).
Get an umbrella company to handle all your tax and NI, that way you won't have the major headache of filling out tax returns.

dsmith

if you have 1 job PAYE.....and 1 limited (umbrella) company you - or your accountant - most certainly will be filling out a tax return .

If you are letting 2 entities handle the 2 lots of income entirely independantly - you are likely to be using 2 x Personal Allowance and paying Tax/NI at incorrect rates. Or put another way - defrauding the IR of a significant amount of Tax.

Kev_turbo

I do just this, I work a full time shift job and run a business part time. You do not need to be a limited company just a sole trader unless the work you are doing could make you personally liable to being sued. As far as tax and income goes keep every receipt you get regardless of what it is. You will be able to claim tax relief for loads of things and if you get a decent accountant to do your books (cost about £100 then a further £100 for the tax return) then they know exactly what you can and can't claim and will probably save their fee many time round. I pocketed what I thought was a fair bit from my part time business last year, it turns out I made a loss of a grand.

PM for more details if required.

Kev

darlodge

No risk of me being sued, well I hope not anyway. I've got public liability insurance should I damage someone, but I do need to increase this.

At the moment, I'm just not sure it is worth it. I've got copies of every invoice I've sent, every image I've sold and every penny I've received so I am not sure what I need to do extra.

How do you end up making a loss of 1k? I'm not sure I understand the maths behind that

There is a free tax consultant by my dentist so I may drop in on day and take my free 15 minute consultation

Darren

Pugster

If you have sent out invoices then the revenue will class you as a sole trader and you need to inform them. You should tell them within 3 months of starting up as they can fine you if you don't

Take a look here:
HM Revenue & Customs: Register as self employed

As a starter.

Once you tell them, you will get a self assesement form next year to fill in where you declare what you have earnt minus any expenses.

Check out Business Link as well as thats got loads of info on what you can claim for

Kev_turbo

Spend more than you make in the first (or other) year. I assume you have spent a good few thousand on photographic equipment, cameras, lenses a fair chunk on a PC for processing and you will need to use your own vehicle to travel.

If you have made less money in a tax year than the business has cost you then you made a loss. In my first year I spent ~£15k on equipment let alone fuel etc and did not make that much back, so for that year alone I made a loss. This year I will turn a tidy profit even after all expenses and new equipment purchases and so will have to pay 40% of it to Gordon Brown for doing SFA. As I said a decent accountant will minimise the amount you need to give away to the government by offsetting any possible costs.

As I said, if you need anymore detailed info drop me a PM

Kev

The Snug Rhino

waste of money getting an accountant for 3k pa of sole trader earnings - call HMRC and they will tell you what to do - very simple, if you are too daft to do a tax return for 3k you are too daft to sitch a camera on so you're screwed either way!

Sauron

If you make a loss on your self employment you can claim sideways relief against your PAYE source of income generating a refund. Very probable in first couple of years.
Claim Capital Allowances for all camera equioment used in business.
Remember to keep receipts for everything you wish to claim for. Just in case an enquiry is opened into your return, remember no evidence no relief.
Claim for % of business/total mileage of car costs servicing, petrol etc.
You should keep a log of business journeys start & end point ,mileage and any additional cost incurred for each job done.
Could also claim for use of room in house as office, but possible CG implications here on sale of house. But unlikely.
But with such small estimated turn over 2k - 3k enquiry would be unlikely.
IR may decide to treat s/e as a hobby with no profit no loss, so no need for return.
If turnover under £15k then IR will only need 3 line accounts for Return, i.e. Income - expenses = Profit/Loss.

darlodge

Thanks for all the information guys. I've got a meeting in the new year with a tax accountant.

Darren