TAX

Summary:

Liabilities in respect of TAX: if setting up a limited company you'll need to register to HMRC and do a self assessment of your company before you can start, HMRC is to also to do your tax returns.

What you need to do when self-employed: You can chose to do paper or online tax return, it's better to do online for self assessment, you'll be sent a unique taxpayer reference by post. A tax year runs from 6th of April 2021 to 5 April 2022, as example, where you'll need to keep track of your records of money going out and in during the period. You can use quickbook and sage to help with this. Also to make sure to keep receipts and use online banking, Alternatively you could pay an accountant to manage your records.

Records you should keep are any money you have made from work as well as royalties based on sales and streams or one-off payments for work carried out by specific jobs.

Incomings: The money you make as a result of the work that you've done for a client/company. This can be royalties based on either sales or streams, or one time payments for work that you have done for clients.

Outgoings (expenses): Consumables like internet and Adobe, Travelling expenses, Home administration. You'll need to.

Tax pay & return: The amount of tax you may need to pay will depend on the amount of earnings you make through the year. If your job is a PAYE (Pay as You Earn) you will to take this into account. The dates to send a tax return depend on weather you are sending it via paper or online format, with paper format being need to be sent on October 31st and the online format to be sent on January 31st of the same year.

National Insurance: You pay NI to qualify for certain benefits and a state pension. You will need to be either an employee earning £183+ or self-employed and making profit of around at least £6,475+ a year before contributions can be taken into account.

Value Added Tax(VAT): Introduced in 1973 it is a tax applied to purchases of certain goods and services that are bought within the UK, which the rate of the VAT was raised from 17.5% to 20% in January 2011. There are a few things that are exempt from VAT, with two examples being Postage stamps along with financial & property transactions.