October 12. 2018
By far, the most common
question we get asked by new self-employed individuals is how much should I put aside
for my tax bill. Unfortunately, this isn’t the easiest question to answer as
every taxpayer is different and any answer must be very general.
To try to give an answer is full of perils as we don’t want a client
to put too much or worse, too little a side and get a very nasty shock in
January. Years of experience tells us that between 15% - 20% of
turnover should cover the Tax, National Insurance and a possible payment on
account. However, it’s unusual for a first-year business to make an outright
profit, initial set up costs can be high.
So, what is the best
advice. The best advice anyone can give you is to get your accounts in early.
The quicker we can prepare your accounts the sooner you find out what is due by
the following 31st January but putting aside 15% - 20% isn’t
the worst idea either.
What happens if
I can’t pay?
The best thing to do
is let HM Revenue and Customs know as soon as you realise you’re going to
struggle to pay your tax. HMRC understand that sometimes businesses
have up and down periods and will normally try to create a payment
plan that’s works for both sides. You can contact HMRC’s payment support
team on 0300 200 3835.
If you have any concerns
about your tax bill or paying HMRC please do contact us on 0344 984
4445.
