Making Tax Digital – coming soon-ish [updated]

Freelancers

Originally posted July 2020. Updated to include delayed implementation date.

HMRC have announced how they’re intending to move to digital tax reporting under their Making Tax Digital project (MTD).

In some ways the announcements are not that surprising. They’ve been talking about MTD for years. I’ve banged on about it many times.

Reporting VAT via MTD is already compulsory for businesses with a turnover of more than £85,000 per year.

What’s new is their timetable for making all businesses MTD-complient. There are two significant dates, and the first is now upon us:

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Posted on 23 July 2020

What are ‘payments on account’ for sole trader income tax?

Sitting at a desk doing admin

I’m often asked about the idea that sole traders have to pay tax ‘in advance’.

That’s not quite true, but the ‘payment on account’ system means you might have to pay tax in advance of knowing precisely what the final bill for the year will be.

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Posted on 22 July 2022

How national insurance changes affect you from April 2022

Announcement

Every year at this time I outline some tweaks and changes to the tax system, so that you can plan your finances better.

This year it’s more complicated, partly because of the government’s reaction to the pandemic and partly because of some decisions made by Chancellor Rishi Sunak to change the balance of who gets taxed and how.

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Posted on 01 April 2022

Student loans and freelancing

NB: This blog mainly uses 2021-22 figures for Plan 2 loans. Figures change every tax year, and might be different for Scottish residents, but the principle is the same.

For useful links, scroll down to the Find Out More box.

Student loan repayments are a bit of a pain when you’re a PAYE freelancer.

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Posted on 03 March 2022

Fancy being an HMRC digital guinea pig?

Digital

I was struck recently that only nine people are in the pilot scheme for Making Tax Digital for Income Tax Self-assessment (known, horribly, as MTD-ITSA).

This is the massive HMRC project requiring sole traders (people registered as ‘self-employed’) and landlords to report turnover and business costs quarterly from April 2024, using special ‘cloud accounting’ software.

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Posted on 01 March 2022

Confusion over taxable status for Covid hardship grants

Last week I tweeted angrily, not something I do often:

The tax office appears to have decided right at the last moment that certain Covid hardship grants should, after all, be taxable. Whereas they’d said earlier that they were not.

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Posted on 31 January 2022

HMRC shifts self-assessment deadline to Feb (2022 only)

For the second year running HMRC have moved the deadline for filing your income tax self-assessment back to Feb instead of the usual 31st January.

Paperwork

They’ve relented to pressure from accountancy and other bodies because so many people are off with covid and might not be able to get everything done in time.

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Posted on 07 January 2022

Will your iPhone help you concentrate?

iOS15 focus control

If you use an iPhone you may be aware of Apple’s latest operating system, iOS 15.

Apparently it’s full of “amazing” new features. Apple are going big on new memojis, and clever things that FaceTime can now do.

As a trainer in freelance business skills the new feature which caught my eye is called ‘Focus’.

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Posted on 29 September 2021

What does the new Health and Social Care Levy mean for freelancers?

HMRC logo

The Westminster government invented a new tax for the UK this week. You can’t have failed to notice that we’re all going to be paying a ‘Health and Social Care Levy’.

You’ve probably also heard that it’s something to do with national insurance.

Well sort of. Here’s a look at the key features and how they might affect freelancers.

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Posted on 09 September 2021

Video explainer: How do deductions work?

If you work for someone else they will make deductions from your pay if you’re paid PAYE.

If you’re self-employed you sort out the deductions yourself. This video explainer looks at how the money flows.

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Posted on 02 August 2021

Our latest training plans as lockdowns ease

Following announcements about the likely easing of lockdown I wanted to make sure I update you swiftly on our training plans for the rest of 2021.

I’ve been delivering training online for about six years with some clients, and was able to move everything online pretty swiftly in March 2020. 

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Posted on 06 July 2021