Wham or Scam

Well, the time has finally come for me to register for Self-employment so I can be a good girl and pay my taxes; the only problem is that it is not that easy to get the information needed. Another commission last week has pushed my earnings up, so I really don’t think I can ignore it anymore.

I am a long long way off getting the kind of income that will see me pay loads of taxes every year, in fact, I am still a little in the red (so maybe I get some money back???), but if I lose my job again it might have some implications for the amount of benefits I receive. Nevertheless, this has to be disclosed.

Reading through the information for registering for self-employment there are certain things that I have to do – like keep all receipts of sales and expenses, draw up a profit and loss account etc etc – all seems like more time out of my already busy schedule.

Is there an upside?

While I am like any other British citizen I greatly begrudge giving away my hard earned cash to the government, we are entitle to list any expenses we may have incurred in running our ‘business’. This means that the cost of advertising (AdWords), purchasing equipment etc etc can be offset with the money we earn. If we make a loss we don’t pay anything and in some cases we may even get money back from the government.

Is there a downside?
Probably for me. I had only just been told by a friend last week that I was supposed to register for self-employment within three months of me making money/starting my business. I may now be liable for a fine. There is not much I can do about it. I cannot carry on not declaring my income so if they fine me they fine me. Lesson learnt. As for the benefits if I lose my job (which is very likely in the very near future) I will have to tell them as well. Who knows if it will affect my benefits.

So what now?

I Have to try extra hard to make that little extra money. If I lose the security of benefits in unemployment this money will come invaluable. It also means that because I can claim expenses I am able to try things that were too risky in my days of unemployment – like AdWords and setting up an E-mail list. The upside is that compared to many businesses out there Internet Marketing has very low overheads so that won’t be so much of a worry.

I may also be entitled to financial help from the government. I haven’t explored this option yet but should I lose my job again I will try and get more information.

Well, lets hope that the fines will not be too harsh .

Disclaimer: Tax law in the UK (and any other country for that matter) is the definition of confusion. The information in this blog post should not be relied on, AT ALL! I am writing as I understand it and in no way am I a tax expert nor am I an expert in self-employment tax implications etc etc. Ask your accountant or contact the tax people who are qualified to give advice.