How to get taxed? URGENT?

i earn around ВЈ833 last month and then ВЈ835 this month. My income is going to be like this around ВЈ830 every month. Thats means about ВЈ10,000 a year. This is from a business i do , where my wife and son are involved.

i actually buy from wholesalers and sell them to customers. Will i need any papers of the stuffs i purchased and sold, in order to get taxed? how will the tax office know how much i earn? I dont keep records of every item i buy from wholesalers. the wholesalers also dont give any kind of invoice or any papers to me.

in this case, how do i inform tax office about my income and how do i pay tax without any proof of income? only thing i can show is my bank balance where ВЈ830 goes every month.

so, how is this going to work out???

any help, highly appreciated.

You need to contact Inland Revenue.

I would suggest that you urgently contact a reputable Chartered Accountant who will be able (for a small fee) to advise you on this and any other business matters or concerns that may crop up.

Good Luck.

Hi,you will have to get receipts from the whole saler has you can claim VAT back.You will need receipts of every thing other wise you will get clobbered by the Tax Man.You could go has a limited company have your wife has the secretary
& your son will also be classed has working for you.You need to see some one for advice on what you can claim.Try the citizens advice its free.However I think you will need to see a solicator.Good Luck

You are best to contact HM Revenue & Customs (Inland Revenue and Customs & Excise merged last year).

You can register for VAT, which means the tax is actually paid by the customer. Most of everything you buy has VAT attached, so any VAT you've paid as a business can have this paid back to you. Non-trading items such as Cash Tills that have VAT attached can be reclaimed too. You are better off with VAT registration than without.

There is so much more support you can get from them.

ok, this is what you need to do.

go to www.hmrc.gov.uk and put "CWF1" in their search bar.
form CWF1 is the form you need to print off and complete, and then send off to the Inland Revenue, once this has been processed by the Revenue, you will now be registered in the Self Assessment Scheme.

if you are treating your wife and son as partners (which is the most tax effective and simpliest way), they need to fill out a form CWF1 too and on this form, you can each fill out the section about partners and partnerships, so you all get flagged up as partners in the same business.

once this is done, the Revenue will contact you about paying class 2 National Insurance, which is currently ВЈ2.20 a week and is usually paid by direct debit ever 4 weeks. so each of you will have to pay this. they will back date this to the date you started trading.

IMPORTANT - make sure the form CWF1's are returned to the Revenue (address on the form) within 3 months of the end of the month in which you started trading. so for example, if you started trading in July 2007, the form needs to be returned by 31st October 2007, or else there is a ВЈ100 fine for each late form.

now, once all these form have been processed, the Revenue will write to you notifying you all of your own Unique Tax Reference (UTR for short) which is your Self Assessment Reference number. its 10 digits long. This mean than come 6th April 2008, each of you will receive a Tax Return, as well as a Partnership Tax Return.

with regards to keeping records, you will have to do it on a cash basis, keep a record of all the cash you spend and all the cash you receive, (you can give receipts to customers if you want).

it would be a good idea to keep monthly records by using a Cathedral Cash book that you can get from places like W H Smiths. this is a very simple pre printed lined book with columns that you can setup so that your income is recorded on one side and that you expenses are recorded on the other.
then each month, totally it up so that it agrees to what has been paid into the bank.

this book will form your accounts and you can claim for other expenses other than just purchasing from wholesalers, but without knowing how your business runs, its difficult to say what they would be, but they usually include things like, telephone, motor, stationery, etc....

now, normally when you have a business, your do your accounts on an annual basis, however if you have just started, its gonna be a shorter period. its a good idea to set a year end date of 31 March each year as this is treated the same as 5th April which is the end of the tax year.

this will make it easier in adding up you totals from your bookkeeping ans easier to put the figures into your tax returns. currently you are in the 2007/08 tax year (6th April 2007 to 5th April 2008. so your first year end should be 31 March 2008.

in all honesty, if you only making ВЈ10000 profit a year and you split this equally between you, your wife and son, then neither of you will have any tax to pay as the tax free allowance you each get is currently ВЈ5225 for the 2007/08 tax year and is likely to go up next year. if you split the profits differently, then make sure no one person gets over this amount.

if however, your profit share is around ВЈ830 a month, which i think is what you are saying, then the tax due is calculated on your share of the taxable profits (not the same a profits per the accounts or what cash you actually receive). This would have to be done by an accountant to get everything claimed for so that the taxable amount is the lowest possible.

the accounts from the partnership will go onto the Partnership Tax Return, then the split of the taxable profit per the Partnership Tax Return, then gets put onto your Individual Tax Returns and the tax is worked out on that. The tax then becomes payable on 31st January each year. in your case, if you treat your year end as 31 March 2008, the tax wont become due until 31 January 2009.

there are other ways to set up the business, ie with just you and your wife as partners then pay a casual wages to your son, but then he wont have to fill out a CWF1 form, but he wont be getting his national insurance contributions so will lose out on his state pension.

in my opinion, it may be a good idea to go see a local accountant who offers a 1 hour free consultation, they can then advise you the best way to set it all up as they will need to know all your income details and how the operation runs.

they can then do all the forms I have mentioned above, advise on bookkeeping and other stuff etc, complete your accounts and tax return forms and tell you how much it woudl all cost.

you can then let them do the first year or 2 and then do the accounts and tax returns yourself afterwards once you have got an idea of how it all works and how to fill the forms out.

I hope this is of use to you.

You need to remember you are running a company and you have to pay all your business expenses out before you calculate your profits.
Your business expenses will obviously include all the fuel you use getting too and from the wholesaler, heating lighting etc costs for where you work from, even if this is the family home you are using it for business so some of this cost is deductible for the tax man.
If you eat out with colleagues and the wholesaler and clients this is all tax deductible so get and keep all these bits of paper.
the phone, postage to clients and potential clients, Internet costs, including the computer, to keep aware of market trends, shoe leather if you have to walk for your retailing work is a business expense. you can claim the tax back on all of that.
Think outside the box on every penny you spend on your business in whatever way. Get receipts for everything!!
Put the receipts in envelopes marked "April" "may" etc, and get a good accountant to go through it at the end of the tax year. Ask people you know who work for themselves who they use.
If your accountant does not save you more than his fees to do your taxes, look for a better one.
You really do need to get some proof of where you get your merchandise (or the back of a lorry with be the suspicion)
and evidence of profits to prove you are making as much as you say.

Get an accountant and quick !!!

The wholsaler should give you a receipt - it will bepart of his business too and will show that he actually sold the stuff he claimed to have bought.

As a stop gap measure, you should record your spending on one sheet of paper or spreadsheet and your income on another for any legitimate business dealing

GET AN ACCOUNTANT, before you contact HMRC.

Get yourself an accountant to handle your affairs.

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