How do you pay your taxes?

dvdbunny · 14 Jun 2007 at 15:35

when i signed up for a vat number i remember filling in the form saying i pay for goods with debit card.

csmager · 14 Jun 2007 at 15:45

You'll still need to fill in all the returns you haven't done. And you'll most likely get a VAT Inspector round pretty soon - they tend to notice if you don't know what you're doing.

dvdbunny · 1 Jul 2007 at 20:44

Happy 2008 thanks very much for your response i have got an excel spread sheet setup the way you suggested and i think everything is sorted now.

Can you please explain one more thing to me?

As i am a very small business with a turnover less than £10,000 is it worth my being VAT registered?

The reason i ask is because miggyb post above seems to suggest that if i wasn't VAT registered i wouldn't have to add output vat on each sale, and would be able to claim back input vat. Is this correct?

My current understanding is that regardless of whether i am VAT registered i would still need to add output tax on all sales. As i am VAT registered i currently do not pay VAT on my purchases . Can i improve on this situation?

Thank you everyone for all your help, i think i got my head around this now.

Regards

Andy

csmager · 1 Jul 2007 at 20:48

dvdbunny said:
The reason i ask is because miggyb post above seems to suggest that if i wasn't VAT registered i wouldn't have to add output vat on each sale, and would be able to claim back input vat. Is this correct?

No - you are correct that you wouldn't have to add VAT to your prices, but you can't claim anything back on purchases

My current understanding is that regardless of whether i am VAT registered i would still need to add output tax on all sales. As i am VAT registered i currently do not pay VAT on my purchases . Can i improve on this situation?

As above, you only charge VAT on your sales if you are VAT registered.

Vonhelmet · 1 Jul 2007 at 21:16

YorkshirePadd26 said:
Can you not register yourself as an employee of an offshore company then surly you'd bill them for the work and not pay Uk tax ?

That wouldn't work. It's still income, even if it's from overseas.

csmager · 1 Jul 2007 at 21:20

chimaera said:
Coming from one of the majority who pay 22% or more PAYE every month...

...Good!

It was about time they closed tax loopholes like that, if you use the NHS or the library or any other public service then you should be paying your taxes just like the rest of us.

Doubt it was as bad as it sounds - I'd wager that 19% Corporation Tax was paid on profits.

Not really in need of a clever accountant - it was fairly standard for contractors to run an umbrella Ltd company that paid them a wage at the personal allowance/NI limits (avoiding paying either NI or IT) and paid the rest of the profits by Dividend (subject to 19% CT).

This isn't allowed anymore though - and CT's gone up.