Don’t make paying tax taxing

 

This week, HM Revenue and Customs released guidance to help individuals plan for their initial tax bill in order to ease worries about the unknown and we can share that advice below.

 

“When an individual begins self-employment, HMRC does not issue the initial tax bill for a while and this can lead to lack of ability to pay once it does arrive,” said Karen Gittins-Jones, Partner with Turner Peachey in Welshpool (pictured). “To ensure adequate cashflow, HMRC recommends that they set aside money from the outset to make sure the business can meet the tax demand.”

 

To assist, HMRC has put together guidance on how much it recommends is set aside for tax and Class 4 National Insurance Contributions (NIC) based on estimated weekly and monthly profit figures. The guidance below does not take into consideration Class 2 national insurance, which must be paid separately (around £2.50 a week for 2011/12).

 

Turner Peachey Chartered Accountants provides a first class service to self employed members of the community and offers a free, no obligation, initial consultation for all new clients, along with business kits and other support documentation.