Self- Employment: Self-Assessment Tax Returns

I am so proud of myself right now; I have just been super organised and filed my 2017/18 tax returns online already! The deadline isn’t until the end of the year, but I couldn’t blog anyway because my site was being transferred to a new host, so I figured I might as well use that time effectively and submit mega early to get it out of the way! Especially after having a massive last second faff last year and finding myself needing to send a paper version in the end, only for Royal Mail to return it to me a week later as the envelope got damaged in transit! So I was then panicking about deadlines and potential late fees; it is a massive relief to know there will be none of that stress this time!

Are you self-employed? If so, you will need to keep records and fill out a tax return form each year too. In many cases that is obvious; people are generally aware that if you run a business and get a regular income from it, you must be self- employed and need to declare your income. However, some people don’t realise that even if you just earn a small irregular income, for example if you mainly blog as a hobby but occasionally get paid work, or if you sell things from home, or receive any other ad hoc income, that you still need to register as self- employed and complete an annual tax return. If that is the case, here’s what you need to do…

Self- Employment: Self-Assessment Tax Returns

Register as Self- Employed

Firstly, you need to register as self- employed. The easiest way to do this is by completing the form online. You must register by 5 October in your business’s second tax year at the latest, although personally I would recommend doing it asap.You will then be sent your Unique Taxpayers Code.

Register for Online Self- Assessment

Assuming you intend to file your tax returns online, you then need to register for this service on the government website. Technically you can use either the government gateway system or Gov.UK Verify to register and submit your returns, but this is the part where it got complicated for me the first time around.

Government Gateway

I tried to use the gateway system, whereby you complete a form online then they send you an activation code in the post. However, this did not work for me and I was told to use Verify to confirm my ID instead. The gateway system is gradually being phased out and will be replaced completely by March 2019, but I am not sure whether this issue had anything to do with it or not.

Verify Gov.UK

So I tried to use the Verify system. And this is where it got really frustrating! For the vast majority of people this would probably be a really quick and easy task. For me, however, not so straightforward; quite the opposite infact!

You see, my passport – which was in my maiden name anyway – had just expired and I don’t have a valid UK driving license either. On top of that my back account is with Nationwide. This combination apparently means you can not possibly verify your identity online with any of the seven different approved companies who offer this service on behalf of the government. Hmm. I wasted so many hours trying to sort it out, it was absolutely ridiculous.

Long story short: eventually I had to renew my passport and open a new bank account with a different bank – just so I could use the government’s online services! Needless to say I was less than impressed.

Tax written on a notebook. Hand holding pencil.

Submitting Your Tax Returns

That said, once you are verified online, it is really easy to submit your tax returns online. If you have all the information you need in front of you, it isn’t too much of an onerous task; actually, it didn’t take me very long whatsoever. If you are submitting online, the deadline is 31st January. For paper versions, it is 31st October.

Record Keeping

Obviously make sure your books are accurate and kept up-to-date, so you have the correct figures to submit. Also keep evidence; receipts, invoices, account records etc… incase you should ever need them. I use a simple Excel spreadsheet to record my monthly income and expenses. I operate on a cash-in, cash-out system, as I find that easiest personally. You will need to check if your situation allows this.

Remember to include all your allowable expenses. For example, if you work from home you can include a percentage of your utility bills. To make this easier, you can use simplified expenses. This is a flat rate, depending on how many hours you work from home per month. Note this does not include phone and internet so they can be listed separately. Once you have got to grips with your record keeping you shouldn’t find it too difficult, especially if you have a straightforward business. However, some people do like to hire a book-keeper to be sure it is all correct.

Calculator, pen, graphs, paperclip

It can be daunting having to complete your tax returns for the first time, but try not to worry! I hope this information is helpful. Let me know in comments if you found it useful!

*Disclosure: This is a collaborative post.

Self-Employment Issues: How To Deal With Variable Monthly Income

If you are self- employed you may well find your monthly income is variable. It might depend on how promptly invoices are paid, some of your work might be seasonal or you might simply have an unpredictable flow of work each month. This can make it difficult to manage finances and create unexpected shortfalls. Here are some practical tips to dealing with a variable monthly income…

Self-Employment Issues: How To Deal With Variable Monthly Income title. Image of desk with keyboard, wallet, plant and pencil

Plan Ahead

If you know your work is seasonal, or you happen to have a particularly good month, then you need to make sure you budget the extra income carefully so that you will be prepared for the slower months when they come around. It might be tempting to spend it while you have it, but don’t!

Once your business is established enough, take an average of your monthly earnings then use that to base your budget on. Ideally, budget for slightly under your average figure to be on the safe side. You can also try to forecast your predicted future earnings and use this information too, but don’t rely too heavily on it – at best it is most likely still just an educated guess! (Unless your business is fairly predictable in nature of course).

Tax Returns

When you calculate your budget, make sure you remember taxes; you don’t want to find yourself with a tax bill that you hadn’t accounted for! Work out roughly how much your tax is each month and set that aside. That way, when you complete your tax return at the end of the financial year, the lump sum will be there ready and waiting to pay the outstanding amount immediately.

Stack of coins and pens on finance sheet

Late Invoices

If you are self- employed it is essential to make sure you invoice corrently, and you must record income and expenditure accurately. So keep a careful track of all of your invoices and note when they have been paid. Chase up late payments after 30 days past the due date and have a clear policy for any late fees. If absolutely necessary, seek legal action to recoup the money. Late invoices sadly are a fairly common occurance and can really mess up your finances so it is important to have a clear process for dealing with this, as well as a financial back up plan.

Income Shortfalls

In reference to the previous point, what happens when an unpaid invoice, or an unexpected fluctuation in income, creates a shortfall? This can be one of the hazards of self- employment unfortunately. Ideally you will have budgeted for this and have some money saved aside. But we all know that of course sometimes this isn’t the case.

As already suggested, the first step is to chase any outstanding overdue invoices, which hopefully might prompt them to pay. There is also plenty of advice on how to make some extra pennies when needed.

However, if this isn’t enough to balance the shortfall, you could consider taking out a loan as a last resort. If you need cash fast you could research quick loans. Alternatively, if you are on Universal Credit, you could also enquire about a budgeting advance from them. Borrowing from family or friends maybe another option. Just remember, you will need to pay it back as soon as possible and you may need to modify your budget to enable you to pay off the interest, and to ensure it doesn’t happen again.

Are you self- employed? Do you have a variable income? I would love to hear your tips for managing this. Leave me a comment!

*This is a collaborative post.

Your Family And Finances: The Rules

When it comes to your family and finances, you need to make sure that you’re handling them the right way. Many people don’t realize that the way they handle their finances and talk about their finances teaches their kids everything they believe about money before they’ve even grown up and had a chance to experience it for themselves. Take a look at your family and finances: the rules…

Your Family And Finances: The Rules title on faded background image of pennies

Always Use Positive Language When Discussing Money

When talking about money, especially in front of your kids, always use positive language. If you talk about money in a negative way, they’ll have a bad relationship with money right from the start. You don’t want that!

Have Regular Meetings

Having regular family meetings where you discuss money, amongst other things, can make it less of a taboo topic of discussion for your family.

Give Your Kids Pocket Money

There’s nothing wrong with buying kids things that they want, but giving your kids pocket money is usually a better way of going about it. This way, your kids get to decide how to use their money early on. Do they want to save it up for a bigger purchase, or spend it on something small? You can use this as an opportunity to get them into their own saving habits, too.

Get Into Good Saving Habits

Make sure you’re in good saving habits. This will be evident to your kids and they will learn from watching you – it’ll also make your family less stressed out when an emergency payment or something of importance pops up! Take a look at the superhero saving habits below for help:

credit to Sunny

*Disclosure: This is a collaborative post.

Easy Ways To Save For Your Family Adventures

Family adventures are great, but unlike the ones you read about in books, they cost money. Whether you like to plan for big trips or days out, it’s nice to have a little rainy day fund to help you pay for your adventures. A family has a lot of expenses, making it hard to put money away, but thanks to these clever savings ideas you can help your family save easily for your next adventure…

Easy Ways To Save For Your Family Adventures title. Sunset beach image with family on pier.

Don’t Buy Anything Without Checking For A Voucher First

In the age of internet shopping, it is possible to find discount codes for almost anything – including days out. It only takes a few minutes to do a quick search, but you could save a lot of money on things you were planning to buy anyway.

Vouchers from supermarkets, clothes shops and other places could help you save a few extra pennies to put towards your family adventures. Sites like Groupon are great for family dinners, and it’s worth signing up to VoucherCloud and other discount code websites too. Always do a price search and see if you could save yourself some money.

Sell Your Unwanted Items

Each Christmas or birthday helps you realise just how little space there is in your home, and how much stuff doesn’t get used. Instead of just letting unwanted items clutter up your home, sell them. If you’ve got streaming subscriptions, you can easily save yourself some money by selling off your old DVDs and Blu-Rays, while unwanted clothes and toys are perfect for eBay. If you want an easy way of posting your items, https://www.shiply.com/ is a great service to make shipping your items a breeze. Having a regular clear out not only helps you to make a bit of money but will keep your house in order too.

Keep A Forfeit Jar

Many families have swear jars, but if your family tends to be good on the bad language front, you might want to consider a different kind of forfeit jar instead. You could have one for anytime someone forgets a household rule, or whenever someone leaves a light on in the house. Keep it up and at the very least, you’ll stop some bad habits, while the best you can expect is a nice healthy sum for your savings pot.

Cut Your Bills

It’s becoming more common for people to switch providers for everything, including your utilities and banking. It’s worth ringing other providers for a quote and seeing if your current provider can match it. There are some great ways to haggle with service providers that can at least get you a temporary saving. Put the difference into savings and watch them grow month after month.

Saving money can be a fun and rewarding challenge for all the family, helping you to afford those little extras. Looking for some more great money saving tips? Check out this useful article on how to what to do when you need money fast. Enjoy finding ways of saving money with your family so that you can look forward to creating many more happy memories together.

*Disclosure: This is a collaborative post.

What To Do When You Need Money Fast

If you’re in a bind and need some quick cash it can be a very frustrating and emotionally distressing position to be in. Nobody likes to be backed into a corner, but if unfortunate circumstances prevail then what you really need are some options – and you need them fast. So here is some inspiration as to how to get a prompt cash injection to help you through difficult times…

Title 'What To Do When You Need Money Fast' with background image of clock and piles on coins

Declutter

You might be surprised by just how much some of your stuff is worth, particularly if you happen to have any collectibles lying around. Even if you don’t have single items of value, decluttering and selling what you no longer need can quickly add up. You can list them on ebay or local selling sites on social media. Or even have a carboot sale!

Sell Your Old Phone

How many of us still have our old phone laying around? It is easy to shove it in a drawer and then promptly forget all about it! But, as I already mentioned above, selling on unwanted or discarded items that are just laying around unused can really help when you are at a pinch. And old phones often have a decent value, especially if it is still in good condition and working order, which is often the case if you upgrade regularly. You can expect even more if you had one of the latest models at the time and it hasn’t been sat around too long! So this item in particular is one to note when looking for items to sell. Of course, the same goes for tablets too.

Find Your Creative Flair

Another thing you can do is to look in the free adverts section, or check out freecycle, then upcycle the items to create something worth selling. Again, you can promote these items on eBay or, with a little creative flair, you could even create an Etsy store.  Try to think outside the box in terms of what are the growing trends and you can make a fortune.

If you are a good photographer, or even artist, why not try selling some of your own work? Either as digital downloads on one of the many stock image sites, on a canvas or as small prints.

If you have a craft skill you could also make handmade items to sell.

Sell Gift Cards

Exchange gift cards for cash. Do you have any gift cards that you haven’t yet spent? Assuming you can’t spend them on essentials, try selling them on local selling groups, or sites such as Zeek.

Market Research Participation

There are tons of market research companies, both online and offline, that require you to simply provide your opinion on a variety of products and services.  The work itself doesn’t pay much, but it can be practically instant and requires no track record, skills, experience, or protracted interview and onboarding process.  The work itself is limited mostly to filling in a few questionnaires and offering verbal feedback.

Odd Jobs

Take a step out of the thirsty teenager’s book; where they’ll knock on doors or leaflet drop offering their services – mowing laws, cleaning windows, walking dogs, chopping down trees, doing ironing; whatever it is, they’ll be open to doing it.

There are plenty of things people will pay money for, particularly the time starved, that you can offer to help them with. It might sound a little embarrassing but you will be amazed by how open some people can be to paying cash for odd jobs they need doing but can’t find the time.

Temporary Work

You could also ask to take on extra shifts at work, or enquire about any potential overtime opportunities. If this is not an option, you could try temp agencies. There are often temporary assignments available, particularly if you don’t mind unskilled manual work and are happy to work shifts. Remember it is only temporary!

Casual Work

If you are more of an office based computer type person, there are online sites like fiverr. Or you could also look into casual work at local bars and restaurants too. Mystery shopper is another popular choice.

Get a Loan

In today’s global economic crisis and this prolonged credit crunch we have been experiencing, getting a standard loan from a bank is proving to be more and more challenging. Banks have an increased sensitivity to risk and are reluctance to lend to people. Not only that, but the interest on the loan is often a lot higher than it would have been ten years ago. Therefore, for many people, the option to get a standard loan from a high street bank isn’t all that viable,

If it is a real emergency, then there are a number of same day loan providers such as New Horizon that subject to approval can pay up to £2,500 within less than 15 months. Whilst this is convenient in an emergency, it is a very expensive way to borrow money so is best used as a short-term stop-gap solution rather than as a long-term financial strategy.

Renting Out Space

If you have a spare room in your home you may wish to consider taking in a lodger. Another popular idea, particularly if you live close to a commuter line station, is to rent out your parking space. Lastly you could even rent out your garage, if you have one. (Although beware of any insurance implications when doing so!)

Switch Your Bank

Sometimes when you switch to a new back they give you an incentive, such as £250 cashback. If you shop around for such a deal you might find you are able to take advantage of one of these offers when you truly need it the most.

Ask! (Or at least talk to someone)

Consider if you have any family or friends you can open up to, and explain the situation. Even if they can’t help in a practical sense, you will probably feel much better having talked it through with someone. And they might well help you out if they possibly can in one way or another. Just like you would hopefully do for them!

*This is a collaborative post.