[samjam]

A friend of mine(mmmmm) has been window cleaning part time for about a year without going down the conventional taxation routes.If he now decides to inform the inland revenue that he wants to start his own window cleaning business,how does he explain not paying tax or NI for the last year and not claiming dole.....

[pdhanson]

Hi Samjam

Naughty boy!  You wouldnt have had to pay tax anyway until about a year and six months after you had started, and even then only if you'd earned over the personal allowance limit (cant remember exactly, but its about £4500)

If you tell them you are starting now, they'll probably ask a few questons about how you have been affording to live.  If you dont have good answers, you might be investigated.  (ALL your financial affairs for the previous 6 years.  They have the power to request your bank statements directly from your bank)

If you just tell the truth, the worst you'll get is a £100 penalty for late notification, and maybe a bill for the NI you mssed (£2 a week) They'll send you a tax return for the year ending april 5 2003, which will have to be in by January 31st 2004.

Personally, I recommend just coming clean.  Apart from any moral question, they are much more likely to initiate a full investigation if you act dodgey, or tell them one thing then another.

Why didnt you tell them when you started? Avoiding tax is not a good idea.  Tax pays for things we all use and need, fire service, police, hospitals, schools.  When people avoid paying, it makes it more expensive for the rest of us.

Silly

[Fox]

I totally agree with Silly Philly on this one.  It is never a good idea to avoid the tax man.

You said it was part time work, Silly is right that you wouldn't pay tax on certain earnings, so you may not have been over the limit, this is usually £4,610 but it does change depending on circumstances.

If working for someone else at the same time then you should have been paying basic rate on all your earnings if you used your tax allowance on first employment.

Yup - only way to do it is to come clean, after all sounds like a serious business is about to be set up, make sure it's all above board.

[paul]

I AGREE YOU SHOULD COME CLEAN THERES ENOUGH COWBOYS WINDOW CLEANERS OUT THERE NOT PAYONG TAX ETC WHICH HURTS AL US LAW ABIDING CITIZENS SO COME CLEAN YOUR FEEL BETTER FOR IT

[g_griffin]

Hi Samjam,  just tell them when you started and they`ll backdate it and let you know what you owe with maybe a penalty. They could find out when you started if they want to.     Gerry.

[matt]

it will only be a 100 quid late fine

As every1 has said above, come clean and pay, otherwise they will catch you in the end, and the fines and interest will soon add up , i know some1 who will be paying his 8 year tax bill for the rest of his working life, the interest on it is rather high  

[samjam]

would i need to register as a business first or would they do it for me.Also would they be asking for proof of earnings? as most of it is done from memory and with a bookI would imagine that not everyone declares all what they earn.Is it up to me to tell them what I earn..Or also,would an accountant do all this for me?

[fez]

You should just tell the truth, there will be no comeback at all. I've checked for you (my mum works for the Inland Revenue!). There's no penalty at all and provided thet you've got all your business receipts, you'll be able to claim for all the equipment that you have bought excluding the gear bought to set up.

Even if you got shopped by a customer, there would be no comeback as long as you then declared what you'd been doing. Big businesses swindle millions out of the Inland Revenue every year, they are not as bothered about small businesses as you may think.

[fez]

it will only be a 100 quid late fine

As every1 has said above, come clean and pay, otherwise they will catch you in the end, and the fines and interest will soon add up , i know some1 who will be paying his 8 year tax bill for the rest of his working life, the interest on it is rather high  

The £100 fine is only for businesses that fail to hand in their self cert forms on time, not for initial, late declarations as in samjam's case.

[samjam]

Thanks for the research...Im still a bit unsure as to what to do first.Either register a new business or inform inland revenue exactly how long ive been working and how much. to be honest id probably be declaring about 100 a week ,i know that tax starts at 89 per week but i want to start paying.Also what happens as my income increases,as im hoping to double my work in the new year coz im only part time at the moment

[fez]

If you check my thread about registering a business name, there's quite a lot of advice about registering.
Here's what I did: Decided on a name, then I opened a business account with a bank using that name so that I can use it for cheques, then I told the tax office about my name change.

When you tell the tax office about your business name, just say that you've been working a while under your own name - i.e. your surname on a (very) part time basis. They'll then help you out with all the ins and outs of running a small business and tell you what you can claim for against your tax, such as clothing allowance and vehicle running costs. You'll be amazed how little (if any) you'll pay in your first year. Next year you'll be able to buy a pure water system instead of paying your tax bill (as I hope to do)!

[samjam]

also wondering if theyll want to recoup NI contributions and tax ive missed for last couple of years.Do you tell them initially how much you are earning or do they leave it to you for the first year?

[pdhanson]

You may find this little leaflet helpful,  its from the inland rev website:

http://www.inlandrevenue.gov.uk/pdfs/pse1.pdf

silly

[matt]

The £100 fine is only for businesses that fail to hand in their self cert forms on time, not for initial, late declarations as in samjam's case.

Correct to a degree, BUT if you dont declare your working SE, you also have a 100 quid payment to make, think its within 3 months of starting

[samjam]

very helpful  cheers.Think im going to have to post date the business start up date a bit.

[matt]

i know the last statement i made is true, as i have just started, well 6 months ago

and i was all keen and forgot tax etc,

WHat i did, was write to the tax office and say this is the second time i have written i am still waiting for a start up pack, they wrote to me and explained i wouldnt have to pay the fine

[scwindowcleaning]

Hi

I started window cleaning 3 wks ago, I do it 3 days a week and work 40 hrs/week in a full time job on the remaining 4 days. I have not yet reqistered with the IR. When I register will I be able to claim the cost of my roof bar, a-frame ladders and other equipment as expenses, or will they be classed as start up costs? I plan to go full time within 2 months, so should I register now as part time earnings, or wait til I quit my job and register as full time?

Thanks
Steve.

[matt]

you wouldhave to work out the costs of the equipment and the tax you would pay, my guess if you have a full time job aswell, you would paya  fair whack in tax

might be worth not telling any1, then use the reciepts as a start-up cost, if its only a few months, this way if the IR ask you why the date is b4 you started, you can expalin you got the equipment and then did canvassing etc and didnt start till you had enough customers

[scwindowcleaning]

What do you use to prove your income? Do you hand over your job book or do you just give an estimation. I use George, will I have to show it to the tax man?

Thanks

[samjam]

thats one of my problems as well.Im sure no window cleaner declares all his work,so what is the best option.