Practical Self Employed Tax Tips
Directors of companies are not self employed but employees of that company. In essence anyone who is in business either as a sole trader or part of a partnership and receives income that is not taxed under the PAYE system is effectively self employed. Occasional miscellaneous receipts would not be regarded as self employment and should be entered on the tax return as “All Other Income” however a regular source of receipts would be regarded as self employment income and anyone self employed should register with the Inland Revenue within 3 months of starting trading or risk being fined £100.
Keep a record of all transactions.
Sales turnover is the amount the business earns before deducting business expenses including receipts of any kind for goods sold or work done such as commission, tips, payments in kind, fees and insurance proceeds. Sales of fixed assets are excluded from sales turnover as are Business Start up grants which are entered in a different section of the self assessment tax return. DIY Accounting produce excel spreadsheets to record the sales income and bank receipts. Check the amounts deposited do not exceed the declared turnover which would indicate that you have understated your sales and your tax liability would at the least be increased unless you could provide a solid reason for the anomaly.
Ensure financial, purchase and sales records are compatible.
Compatibility will vary from business to business. Examples if you post 100 EBay items your records should show 100 items of income and 100 items of postage. Buy food for a restaurant for resale at four times cost, some wastage is inevitable but the underlying compatibility between sales generated and purchases should be reasonable. The average number of meals sold from a take-away shop should be compatible with the number of take-away cartons purchased. A taxi driver should not claim fuel receipts during his holiday period and the fuel bills should be compatible with the fares obtained. Unusual and incompatible expenditure declared on the self assessment tax return can and do trigger Inland Revenue enquiries. Many Inland Revenue enquiries result in a higher tax liability due to the scrupulous professional way in which compliance investigations are carried out.
Obtain receipts for everything.
Tax payers lose millions each year by not obtaining or retaining receipts for expenses. If you are claiming fuel costs for a business trip and fill up with £50 of petrol get a receipt. The tax saved by including that receipt in your accounts is £11 at basic tax rates and £20 at higher tax rates. If your business turnover is over the vat threshold of £64,000 p.a. for 2007-08 the receipt is worth even more. £16.81 vat and income tax at basic tax rate and £24.47 at the higher income tax rate. The same is true for all other business receipts. Obtain a receipt for everything. If you lose a receipt then still include that expenditure in your accounting records but if your tax return is enquired into by the Inland Revenue that expenditure may be disallowed unless you can argue and sometimes prove the expense was in fact incurred. May help to note in your records – receipt lost.
Do not mix business and personal.
The general rule is that items solely for business use can be claimed for tax purposes and the business proportion of personal expenditure may be allowed although the rules are applied quite strictly. If you purchase both business and personal items from a supplier the business expenses only can be claimed but if you obtained all the items on a single receipt you would be disallowed the cost of that journey as it was not solely for business purposes.
Claim business expenses incurred prior to trading.
Business expenses incurred up to seven years prior to trading actually commencing can be deducted from business turnover if these expenses were solely for the future business purposes. Enter such expenses in your accounting records as if they had been incurred on the first day of trading but show the actual purchase date.
Claim home costs if you work from home.
If part of your home is identifiable as solely for business purposes then home costs can be claimed. The cost allowed is the proportion of the total area of the home the business area occupies. For example, excluding shared facilities of kitchen and toilet if the home has three bedrooms, living and dining room and one bedroom is used solely as an office then 1/5 of home costs could be claimed. The home costs to claim would be heat and light, insurance, general and water rates and mortgage interest excluding repayment amounts. Where mortgage interest is claimed the revenue might also claim as a capital gain the increase in value of that proportion of the home, such Capital Gains Tax being subject to tapering relief over time. It may be safer not to claim mortgage interest as part of the home costs.
Take care if claiming a partner’s wages against profits.
Partner’s wages can be deducted as a business expense although there are rules which would be applied in such circumstances to ensure the amount paid is both real and reasonable. The business would need to operate a PAYE scheme for the partners’ wages, deducting income tax and national insurance, perhaps using a package such as DIY Accounting have available using Payroll Software to produce all the statutory requirements. The work carried out must be real not invented and the rate paid reasonable for the nature of the work and the time spent. Evidence may also be required that the partners’ wages were actually physically paid to that partner, for example in the form of a cheque.
Claim vehicle costs or mileage allowances.
Vehicle running costs and expenses such as fuel, excise duty, insurance, repairs and breakdown membership may be claimed as business expenses if the vehicle is used solely for business purposes. Travel from home to work is not business use and disallowed. The proportion of vehicle running costs and capital allowances which are claimable are dependent upon the proportion the vehicle is used for business and personal use. Parking fees for business purposes may be claimed. Parking fines and penalties for motoring expenses are not claimable as business expenses for tax purposes.
An alternative to claiming vehicle running costs and vehicle capital allowances would be to claim mileage allowances which at the time of writing are 40p for the first 10,000 miles and 25p per mile thereafter.
Write off expenditure against taxable profit unless the item is a fixed asset.
Depreciation is not allowed and replaced by Capital Allowances for the purposes of calculating the tax payable. Capital allowances are designed to write off the cost of purchasing a fixed asset over the life of the asset rather than in the financial year in which it was purchased thereby spreading the tax relief on the asset over those years. Many assets purchased by small businesses fall into a grey area as whether they are fixed assets or normal business expenses. Generally a fixed asset would be defined as an item that would be used by the business over several years and usually of significant value. 100% tax relief is obtained on items purchased which are not fixed assets.
Avoid fines and penalties by submitting tax returns on time.
Accounting records and Self assessment tax returns should be prepared well in advance of the first submission date of 30th September to enable the information to be checked and verified before submission to ensure all possible claimable expenses have been included. The final deadline for submission is 31st January with late returns and payments being subject to penalty fines and interest payments which should be avoided.
By: Terry Cartwright
About the Author:
Terry Cartwright provides tax efficient Accounting Software at DIY Accounting for Self employed and small companies at DIY Accounting Software and Payroll Software at DIY Accounting Payroll Software
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Tips on Creating a Successful Resume
Choose the Type of Resume: Reverse Chronological, Functional or Combination
The reverse-chronological resume is the most popular resume. It lists all of your accomplishments, education, and experience in reverse-chronological order, beginning with the most recent and working back from there. Choose this resume when you have consistent employment – no job gaps.
The functional resume showcases skills, they will be the bulk of your resume, followed by employment and education. For example, if you are applying for a position as a journalist, you list the your skills for that position in a special section with subheadings that might include: “Editing” “Investigative Reporting”, “Research”, etc.. Use this resume when your job history is less than stellar and/or you’re seeking a career in a new field.
The combination resume is one that, obviously, combines the features of both reverse-chronological and functional resumes. Within the combination resume, you showcase your skills, as you would in a functional resume, but you also include your prior work history to show that you have no gaps in employment. The combination resumes are good not only for targeted job searches, but also for cross-career moves such as a marketing manager applying to become a marketing professor.
Appropriate Page Length
A resume is as long as it needs to be provided it contains only relevant information for the new job search. Most resumes are one to two pages in length. Don’t try to cram all of your information into a one-page resume to reach an arbitrary page length. If the resume doesn’t look good, it won’t be read.
Tailor Your Resume to the Position
Never send a cookie-cutter, generic resume to numerous employers. Many employers see this as lazy, and figure if you did not put much effort into getting the job, you won’t put much effort into performing the job either.
Never use an objective. An objective is telling the hiring manager what you want. Hiring managers don’t care what you want. They need to know what you can bring to their company. Therefore always use an opening summary called a Qualifications Summary. In it, list a recent, relevant, and quantified accomplishment that will prove to the hiring manager that you’re the correct candidate for the position.
Proofread and Proofread Again
Of course we all know that spelling or grammar mistakes on a resume are an instant turn-off. However, one thing you may overlook is proofreading your names and dates. Be sure everything is reverse-chronological, with no overlap in dates.
With these tips in mind, you can create a resume that makes a good impression and stands out from the competition, leading to an interview with the prospective employer, and then, hopefully, a long and fulfilling career.
By: ResumeEdge
About the Author:
ResumeEdge is a leader in resume editing and writing services. For more information, visit ResumeEdge online.
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Is there employment for me?
I was just recently laid off after working for a temporary agency for about a year. I have excellent computer, data entry, clerical and customer service skills. The problem is that I’m 33 years old and I just enrolled in paramedic school. Medical people don’t want me due to lack of experience. Office people don’t want me-I’m not “one of them” because I’m going to paramedic school. My classes are Tuesdays and Thursdays, during the day. How should I go about finding employment? What tips do I need?
I have no sales experience.
This is not like I can work part time every day of the week. This is you go to school from nine to five twice a week and you may have two clinicals on your off days and you have the rest of the time to work.
Temporary agencies fail to understand this. Until they start to understand it I refuse their assignments.
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Interview Tips for Job Seekers in Chichester, West Sussex
This article is designed to help people find jobs in Chichester or to find a new job near Chichester. With the job market now more competitive than ever, you need to give employers every reason to pick you when you get to the important stage of being invited for a job interview. The first 30 seconds of a job interview are very important. Here are a few helpful tips on what to expect and how to prepare for your job interview.
Job Interview checklist
Make sure you double check the time, date and location of your job interview
Plan your route the day before, eg if you are being interviewed for a job in Chichester you could get a route map from google maps so you can pin point the place to be before hand, or even make a trip there the day before to avoid any stress on the day
Research the job and company before the interview, a few minutes spent typing the company’s name into Google will be time very well spent. Read the company’s about us page and any news articles you can find. Your interviewer will be impressed if you have some understanding of the company and its background
Re read through the job advertisement on allChichesterJobs to remind yourself what the job involves and what the recruiter is looking for
Re read through your CV and have a good think about exactly why you think you’d be good for this job
Look Good, Feel Better
Rightly or wrongly, looks can make a difference, be smart and look professional. Think about the company you are applying to – how do your potential future colleagues dress for work? If you already look the part then you’re on the way to fitting in at your desired new job!
Be on time!
Always keep in mind that you never get a second chance to make a first impression, so make sure you’re prepared. Aim to arrive 20-25 minutes before your interview time, that way if your bus is late or you get stuck in traffic you’ll still arrive on time. If you arrive early, you could wait nearby at a cafe or have a short walk round the area thinking about what you plan to say in your interview. Aim to report to reception exactly 10 minutes before your scheduled interview time.
Look them in the eyes and smile
Eye contact is one of the most important aspects while on your interview and can make a significant difference in how you present yourself. If you look away when speaking to someone, you are viewed as lacking confidence or not interested or being dishonest. So always answer the question with eye contact, and without glaring.
Be enthusiastic and positive
During your job interview always be enthusiastic. Do not be negative or mention any bad points about previous employers. Focus on positive achievements and views, always smile and be attentive.
What not to do in your job interview
As well as preparing for what you should do on a job interview, whether it’s a part time job in Chichester or that perfect next step on the career ladder, it is just as important that you know what not to do.
Don’t be late!
Don’t swear or use slang words.
Don’t slouch in your seat or do anything else that makes you look disinterested.
Don’t lie! The interviewer may see through you. Even if you get the job, your employer can dismiss you if they find out.
Don’t let your nerves show too much. It is normal to be nervous, but you can’t let your nerves take over, as this will affect your performance. Use breathing techniques and try to remember that it’s not a life and death situation; there are plenty of jobs on allChichesterJobs.com!
Don’t be arrogant and assume you’ve got the job. Nothing turns off employers more than someone who is disrespectful and over-confident.
Don’t read from notes or your CV. You should be familiar enough with your own history to be able to talk about it unprompted.
Don’t argue with the interviewer, no matter what. Remember to keep things positive!
Top 4 questions asked at job interviews
1. Describe your strengths
It is almost guaranteed that on most job interviews you will be asked what you think your strengths are (and sometimes what you think your weaknesses / ‘development areas’ are too). You want to leave a positive impression in mind, so you will need to show that you are in the process of overcoming your weaknesses. Once thing is for sure, you need to have thought about this common interview question in advance so you know roughly what you will answer when asked it.
2. Why do you want this job?
Think carefully about this question. Stress the positive aspects, that have attracted you to applying for this job.
What qualities do you think will be required for this job?
Their advertisement for the job may help you a little bit, but you should also think of the other qualities that may be required. These may include leadership ability, supervisory skills, communication skills, interpersonal skills, problem solving, logical skills, etc.
3. What can you contribute to this job vacancy?
This is your chance to shine. Tell them about your achievements in your previous work that are relevant to the new position you are applying for.
4. Why do you want to work for this company?
Emphasise the positive reasons why you want to join their company, but avoid aspects such as more money or shorter hours. These may not endear you to a prospective employer. Stress opportunities for personal growth and new challenges.
Finally, don’t give up your job hunt!
The fact is that you may not be offered every job, however perfect you think you may be for it.
If you do not get the job after an interview it is a good idea to run through the interview with someone and try to help them to identify any areas where you could have done better. There will be other opportunities in time and any failed interviews should be looked upon as part of a learning process.
Don’t forget that performing well at an interview is a skill and it can be learnt and improved with help and practice. There are plenty of jobs in and around Chichester – the main thing is to find the right one for you!
We wish you the best of luck with you job hunting!
By: Louisa Anderson
About the Author:
Louisa Anderson is a recruitment expert having worked as a recruitment consultant for 12 years, she is Content Editor for All Chichester Jobs and Brighton Job Search and All Worthing Jobs




