Tax Returns

What is the best approach to keeping on top of this from a tax as these can be short term contracts.

It's all PAYE isn't it? Main job on a normal tax code and everything else on emergency/zero-allowance? In which case, you just complete self assessment online at the end of the year and fill in as many separate employments as you have had, using the P60 for each. You end up with a total income, a total of tax/NI already paid and a total tax/NI liability, then you pay the balance or receive the refund as applicable. For small differences they can adjust your code, and in theory if it's all PAYE they should work it out without your help.

The emergency/zero-allowance code is probably right if your primary employment gets you over the basic rate threshold but your secondary employments don't then take you over the higher rate threshold.

You don't need an accountant, if you want to plan for a possible tax liability at the end of the year a simple spreadsheet will do. Add income received and tax/NI paid every time you get a pay slip, use the total income received so far with the thresholds and rates to calculate your actual ongoing liability

Are you looking for sympathy and then trying to be smug with the grants funding.

Might have read it wrong but you sound like a clown if I haven’t

Just trying to wind up gbj_tester who seems a bit put out that I, fairly and legitimately, have my payments on account reduced to zero almost every year at no cost to anyone, so I can function as an artist with sometimes no income if I choose. It's fine though, I don't think he's easily wound up.

As it happens yes there is an element of clowning in the work I make. You're right I do sound like I'm after sympathy, and there are people much worse off then me, so perhaps I'll wind my neck in.

the on account payment is effectively the tax on the money you earned in the first half of the current tax year that ends in April.

And if you've earned next to nothing in those months, and are living off savings, it could put you in debt and force you to abandon important projects that happen to make a loss. I guess there's a wider debate here about whether art has any inherent value and should be counted as a job. Since it's the only reason I ever do anything, I obviously think it does / should.

at no cost to anyone

If you delay paying your tax, the government has to borrow money while it waits for you, and we all end up transferring more of the fruits of our labour to the property owning class who are the ones with capital at hand to lend to the government.

In economic terms, paying late is the same as getting a discount, and the cost of that discount falls on tax payers.

On the basis of the figures provided, it looks like you probably should have made payments on account in at least some of the years when you didn't. You exploited the fact that HMRC are credulous about people's claims of income variability in order to obtain a benefit for yourself. While this might legally not amount to tax evasion, it's certainly avoidance. Have you considered a career in politics?

If you delay paying your tax, the government has to borrow money while it waits for you

And if I pay more tax than I'm required to, because I'm in a low income year, I have to borrow money while I wait for the government to pay it back. When the government sit on our overpaid tax, money we need to live on, do they pay us back with interest? Nope. I usually pay all my tax the day I do my return in April, so I guess half of it is "late" for the January payment on account, and half is "early" for the July payment. I've never avoided it, never had a discount, and never knowingly been "late" until now.

Sounds like you're in favour of fewer small creative businesses, and a higher tax burden on those that remain. Have you considered a career in politics?

When the government sit on our overpaid tax, money we need to live on, do they pay us back with interest?

Yes. The interest rate on overpaid tax is on the HMRC site. I have personally received interest from them when my payment on account was higher than it should have been because I ended up with lower profits than the previous year.

Well that's an important point, thank you for putting me right. Debatable if the full cost of personal loans / bank charges would be covered. When I paid too much on PAYE many years ago, I remember normally getting back less than expected. Probably my crap maths.

Whatever the fairness or otherwise of reducing payments on account, I do now realise reducing them every year is unusual, and it was disorganisation/ negligence that led me to accrue this interest. I'll check my tax account more often in future.

. I usually pay all my tax the day I do my return in April, so I guess half of it is "late" for the January payment on account, and half is "early" for the July payment.

If you were properly making no payments on account, which is a thing for some people, then you were actually very early for the balancing payment due the following January, and would have received interest on the whole sum for the period between HMRC's receipt of your payment and it's falling due.

properly making no payments on account, which is a thing for some people

So when is it exploitative tax avoidance at the expense of other taxpayers, and when is it 'proper'? I'd like to be one of the proper ones.

Pretty sure I've never been paid interest for paying early, but thanks for flagging this I'll check.

So when is it exploitative tax avoidance at the expense of other taxpayers, and when is it 'proper'?

It's legally proper when you have asked HMRC to reduce your payments on account to zero and they have agreed. It is morally proper when this request was made on a good faith belief that your profits would be so low that HMRC would have set your payments on account to zero anyway had your profits the previous year been so low. If you wilfully claim that your profits are likely to be so reduced while not having a good faith belief that this is so in order to obtain a deferment of payment (i.e. a discount, to an economist) then that is at least tax avoidance, and there is a possibility that a court could be persuaded that it's evasion.

Sounds like you're in favour of fewer small creative businesses, and a higher tax burden on those that remain

I may have misled you with my facetious Marxist rhetoric, but I'm in favour of fewer creative accountants and as a result a lower tax burden on the smallest businesses.

a court could be persuaded that it's evasion.

Bring it on. I'll win the judge round through the medium of interpretive dance.

Ideally I'd just trade poems for food and there'd be no need for any of this nonsense

Awesome thanks! Will try

Ideally I'd just trade poems for food

That would work if you could find somebody who had excess food and a deficit of poetry. For everything else, there's money 🙂

Everyone has a deficit of poetry. In light of that, here's something quite good by Kay Ryan, free of charge

Poetry is a Kind of Money

Poetry is a kind of money
whose value depends upon reserves.
It’s not the paper it’s written on
or its self-announced denomination,
but the bullion, sweated from the earth
and hidden, which preserves its worth.
Nobody knows how this works,
and how can it? Why does something
stacked in some secret bank or cabinet,
some miser’s trove, far back, lambent,
and gloated over by its golem, make us
so solemnly convinced of the transaction
when Mandelstam says gold, even
in translation?

.

free of charge

Although its true value is less than half that 🙂

Got a letter from HMRC - you owe us an interim VAT payment. First I've heard of it. Call them up;

HMRC: "Oh yeah, you actually owe us three interim payments. I can see here you were never sent your start of year summary showing what you owe and when. We also didn't send you any reminders about the previous two payments."

Me: "So none of this information is visible in my online tax account, you can't email it, and you didn't send it as a letter. The only way I can find out is to phone you and ask what I owe and when?"

HMRC: "Yeah, lol"

So I completely forgot my tax return for last year. I though that I had completed it months ago. It would appear, however, that I just didn't do it at all. Balls.

Balls

And £100 fixed penalty
https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch62100

It's so annoying isn't it?

I remember mistakenly doing the next years once by mistake and getting fined. I only realised when I was aruging with the person on the phone about it.

Happened two years back here as well
Fine was six hundred notes
Not best pleased

I'm not sure how you forget to do your ITSA return once you're in the system, I had email reminders from them basically every month from year end then every week from Christmas and every day of the last week before the deadline

Nor me, but I am especially stupid

I had email reminders

Basically now the least reliable of reminders. A brown enveloped letter through the post, or even a text message, is orders of magnitude more likely to prompt some kind of action. Email is now where important stuff goes to die, if it even gets delivered at all.