2 Phases of Successful Planning For Self-Employment Taxes

Be better prepared for those end-of-the-year taxes, even when you are self-employed.

15:05 25 March 2013

If you started your internet business, consulting, crafts, or other type of self-employmentthis year there are a few things you’ll want to know before you are surprised by the taxes.  Here is the information you will need to have at the ready.

 

Prepare:

 

• Records of all your self-employment income.

 

• Records of any reliefs or allowances you receive.

 

• Information on any other form of income you may have.

 

• P60 forms from any relevant employers during the tax year.

 

Consider:

 

• If you are both traditionally employed and self-employed you may end up overpaying taxes. Be sure to provide documentation for your Class 2 and/or Class 4 National Insurance contributions.

 

• If you decide to defer your contributions, fill out the proper forms before the deadline (usually the very beginning of April).

 

• Keep your business records such as cashbooks, bank statements, expenditures for business use, rent books, payroll records, and mileage information, anything else related such as maintenance records that pertain to the business or business use.

 

• Find out if you will need to pay Value Added Tax (VAT) as well.

 

These are just a few of the things that you’ll want to prepare and have handy for your self-employment taxes at the end of the year. A good rule of thumb is to keep anything at all related to financial transactions that involve your business.

 

You may not need all the data for the various business records listed, but it is important to have all of that material at the ready.

 

Also before you jump into the task of figuring out self-employment taxes, you may want to enlist the help of an individual such as a person from the Citizens Advice Bureau (CAB) to figure the amount of credits you receive.