Tax self assessment

[Outoutoutshout]

I work full time so have never had to worry about self assessment of taxes or sending in any tax info. It's always just been done as PAYE.

I will still be working full time but I'm going to start doing a few hours a week setting up a small business of my own. Ideally earning about £300 a month just to top up my earnings a bit. My new clients will pay me with cash or BACS. How do I go about sorting taxes for this? It will just be me. No wages involved for others.

I've got myself so confused with it all. Is it easier to use software like QuickBooks? How does that work with cash/BACS payments? Why do you need to do tax returns by January when the tax year doesn't end until April? Do I need to register such a tiny business? (Obviously I know I need to pay taxes but is it just taxes I need to register?) I'm getting so muddled with it all. I'm confident I can get my business to earn a few hundred a month but not confident with the logistics of the money side.

Anyone?

It's quite simple to do. For a small business as yours, I would probably just keep receipts/invoice and record it in an excel spreadsheet. You can record it on your tax year and a cash in/out record.

You submit your tax return for the previous financial year. Ie Jan 2023 deadline will be for the tax year April 2021-March 2022

Disclaimer - I'm not an accountant/book keeper.

The January deadline is for the tax year ending the previous April, so you have time to get your accounts together!

I was partly self-employed for a few years, and the system has probably changed since then. But when completing the form, online you tick boxes about which sections you complete (employment, investment income, capital gains, etc etc etc) If you tick the box for "self-employment" then you'll get about a dozen simple questions (income, expenses, net profit). It was very straightforward!

I'd agree with the above, with the proviso that Making Tax Digital is coming which is likely to require software to deal with the quarterly submissions.

You need to do your return by the end of January following the end of the previous tax year. So for the tax year ended April 22 you need to do it by 31st Jan 2023.
The forms are actually quite straightforward - I find the thought of it far worse than the actual doing of it - but then I loathe all paperwork!

You do need to register for self assessment in plenty of time, in order to have login details ready.

Thanks all. Is there a cheat sheet anywhere to help with all this stuff?

First you need to contact HMRC and set yourself up as a sole trader.
Get a Unique Taxpayer Reference - UTI and a government gateway account.

Here is where you do your yearly tax return. They give you ages to get it done. I still need to do my last tax year's one and we have until end of Jan to do it online.

I do work at home for a few clients and I just use Excel to record what comes in, and also what goes out for work expenses - you can use a portion of your utilities, look it up, you can use the simple calculation which might be a tenner a month, unsure but I don't earn enough to pay tax on it so it doesn't matter too much to me. But you will be paying tax on it since you work full time all your tax allowance will be used up so you want to go and find out what deductions from profits you can use.

So like software I use is tax deductible.

In Excel, absolutely no need to use anything more, I have my figure for each year and when you do your self assessment it's literally a case of inputting your figures from the work you do, your profits. That's really it.