Accountants and Tax

Register online for the self assessment, I found this a lot easier, while I was working a bit of self employed last year. You can send it to them online there and then, and pay it, all in one go.

Also there is a lot of help section on there, for each bit you fill in, as well as the help number, when putting in the details. Saved me a lot of time & efford in the long run.

Have you registered with the Tax man as self employed?
I assume you've contacted him, to confirm that you do actually need to fill in a tax return now, they seem to do it at different times. (I had to fill in my Tax return in April, now they are asking me to paying for last years Tax return).
This could be why they haven't sent you a Tax Return, cause they'll send you one in April time, to fill it in, but you should deff register now for online, as your better off doing this before it comes to it.

Best to check with the Inland Revenue themselves though, to be sure you don't need to fill one in.

If you've never used the Government Gateway before (i.e. the thing that lets you log onto self assessment on line) you need to register ASAP as it can take a week for the user id to be sent through (it comes through the post not via email).

Not being asked for a tax return is not a defence. It is up to you to decide if you need to fill one in. If you don't and are found out then HMRC will come after you plus charge interest on any tax you haven't paid.

It's usually just a case of entering all your income (including things like bank/building society interest), then you'll be asked to fork out the tax and National Insurance. Hopefully you'll have set aside 50% of your income over the year to cover this otherwise you may be in for a nasty surprise as the tax will be due on the 31st January and interest is charged if you don't pay on time.

If you are self employed I agree that it is probably worthwhile employing an accountant as they will claim a load of expenses which you wouldn't have thought of and save you a fair chunk of tax (and more than cover their fee). Again, I'd speak to one soon as this is their busiest time of year (mine is working 7 days a week at the moment) to guarantee they can fit you in.

The half is due if you are a higher rate taxpayer (40%) plus you will need to pay some form of national insurance on top of that. I'm not entirely sure of what the rate is for self employed (I run my contracting business as a limited company so I pay myself through PAYE and take dividends) - but I suspect it is in the order of 10 - 12% up to some sort of cap when it will fall to the lower rate. The info will be on the HMRC website. So remember it isn't just tax you have to pay - it is NI as well.

If your tax is over £1000 (I think?) for 07/08 you will also have to pay half your estimated tax bill for 08/09 at the same time (i.e. the end of January 09) - this is known as payment on account. The second half then becomes due at the end of July 09. The estimate is purely based upon what you earnt this year, and HMRC will automatically add it to your bill.

If you expect next year to be less, you can ask to have this reduced. However if you have it reduced and then you find your tax bill is about the same as what it was this year, HMRC will charge you interest for not making a payment on account. If you have overpaid, you will get it refunded when you complete your tax return for 08/09 - and I think they pay you interest if you've overpaid significantly.

All in all, the first year you do it it is a bit of a minefield, but remember to make some notes so you don't forget about it next year when you have to do it all again.