Can anyone help me? ive recently gone self employed, will i have to pay tax in my first year trading?

Answer 1

You will certainly need to submit accounts. This is really a question for an accountant and you should seek one out. They will have all the answers and you will have a clearer picture. Good Luck in your new venture. Hope it is a major success.

Answer 2

You will have to pay tax at the end of the year up to april of the year you have traded in. For example by January 31st 2007 you will have to have actually paid your tax for the year April 2005 to April 2006. If you don't pay it by the following January you will get fined for each day you are late paying it.

However the amount of tax you pay depends on your trading and profitability. If you don't make any money, you will probably find the tax bill very low even zero as your allowances for the year will exceed your earnings.

My advice would be to keep meticulous records of everything you earn and spend, including reciepts and hire a good accountant!!

Answer 3

Firstly you need to register as self employed with the inland revenue, they will give you a tax reference number and ask you when your year end will be, this is so that they can send you a tax return. You can apply to do a tax return online, you need to be sent passwords and stuff.

The Inland revenue works on a six month basis. They send out bills Jan 31st and July 31st. You will need to decide when your year end is going to be.

Let's say, that you decide your year end will be on the 31st March 07, you will need to run a year end and then send the Inland Revenue your tax return, to fill it out you will need all the details from your year end summary.

The Inland Revenue will send you a bill to be paid by 31st Jan 08, this bill with have Dec06 - March07 tax and an estimated bill for April07 to April 08.

If you know nothing of accounts, either take a course at night school, call the Job Centre, they run workshops for people who are just self employed, or get a good accountant.

Answer 4

all depends on the level of profits (if you make any).

the tax year runs from 6th april to following 5th april so say if you select a period or year end of 31 march (treated same as 5th april) you can do your accounts from the day 1 of trading to 31 march and work out the profits accordingly (best to get an accountant to do this for you)

if your taxable profits are more than your personal allowance ( this is the amount you can earn before paying tax which is £5035 for the year ended 5th april 2007) then you will have to pay tax.

the tax due for the year ended 5th april 2007 will become due on 31st jan 08. now depending on the the level of tax you have to pay, you may have to make payments on account for the 07/08 tax year which is 2 payments of half the amount due for the 06/07 tax year. the fisrt payment is due along with the balance of 06/07 on 31st jan 08 and the second half is due on 31 jul 08.

the idea of this is that the revenue assume your profits will stay the same and therefore you will pay the same tax. This is not always the case as you may pay more on higher profits or get a refund on lower profits.

hope this helps abit as it can get confusing.

Answer 5

You need to register as self employed within 3 months. Keep all paperwork in perfect order.
Your tax year runs from april 2006 to april 2007.
You have to file a self assessment form by dec 31st 2007 and pay your taxes by end Jan 2008.
Worse than that this is IMPORTANT you have the nice surprise of having to pay 50% of the
tax bill again in Jan 2008 and another 50% in June 2008. This is a deposit against the tax year 2007 to 2008. You need ideally to overestimate your tax bill each quarter and put it to one side in a seperate bank account. That way you will have enough to pay them.
Sorry for the bad news. At least you don't have to pay Jan2007 like me.

Answer 6

As a sole trader or partnership, the first year tax is a bummer..the Uk govt actually bill you for 18 months worth of tax in your first year trading. The twelve months that you have just earned and 1/2 again as the first instalment of next years tax (just in case you go out of business)

Best advice is see an accountant ASAP and start saving!

As you get paid for work put 40-50% away in a high interest savings account and leave it there so that you have the money when the dreaded tax bill arrives!!!!!

Answer 7

One would hope that you would have to pay tax, because that means you have been making a profit.

Ideally, you should take your records for the period to April 30th 2007 to an accountant (Chartered ort Certified) and have them crunch the numbers for both April and March year ends. Overlap relief is a nasty thing, as is the basis for taxation in the first three years of business. Trust me, you do not want to screw that up.

If you have tax to pay, the first payment will be due on January 31st 2008 and, most likely, every six months thereafter.

Answer 8

You need to pay your tax in the next tax year after youve been trading. For example if you are trading now. You will get your first tax bill will be up until April 2007

Answer 9

At the end of the tax year you can either submit your tax return yourself or else pass it on to your accountant. You then have to pay your tax before the end of January of the following year - ie. if you work from April 05-April 06 and then submit your tax return, you will have to pay the amount due before January 07. They will ask you to pay for the amount owed from working April 05-06 and also, based on that amount, they will take the 6 months advance payment from April 06-January 07.

Your local Inland Revenue office (or Her Majesty's Customs and Excise Office) can offer advice, they're quite helpful. Or, check out the HMCE website for information.

Answer 10

You almost certainly will unless you earn an incredibly small amount. However I really recommend you get yourself some free advice & training from your local enterprise agency who will be able to help you with many aspects of setting up and running a small business, not just the tax issues. Try www.nfea.com to find the agency nearest to you.