Struggling to understand your taxes? Don’t be embarrassed. It’s a subject that’s full of jargon and intricacies, and you’d be forgiven if most of it went over your head.
In order to help you out, we’ve laid out several of the most common tax questions on the planet – and answered them too!
What do I do if I can’t afford to pay my taxes?
Don’t worry, that’s a good start! Thousands of people struggle to pay their taxes every single year, but just like any other expense, it can be worked around.
For starters, you can take out a loan to cover any existing or potential future tax debts. Obviously, you’ll then be in debt with that loan, but I’d rather owe money to a lender than the taxman! You can also seek tax relief, but this isn’t always applicable.
And then you have options like a credit card, or borrowing off a family member. Just remember; tax is an expense, just like gas and electricity. You can pay for it how you like!
If I have a business partner, who’s responsible for paying company taxes?
This question usually comes hand in hand with another question – namely, what is a Director Penalty Notice?
The answer to the first question is the nominated partner. This is the person who, when you set your business up, is identified as the responsible tax payer. This person will then get any director penalty notices, which is a notice that the company owner is responsible for business tax debts.
So when you first set up your company and register as a sole trader, one of you will be nominated as the tax payer.
What receipts should I keep throughout the year?
All of them. Even if you think they won’t be deducted from your return.
For the uninitiated, you can ‘deduct’ the costs of running a business from your tax bill. Simple really. When you fill out your tax return you’ll see a slot for ‘deductions.’ Enter this figure here, but you may be required to provide proof.
You can either take a generic deduction, where you can just claim a standard amount set by the government. Or, you can save up all business-related receipts, which could come to a bigger total.
Do I need an accountant?
How much time do you have to devote to doing your taxes and returns? If it’s not a lot, then yes you do.
Accountants have a reputation for being overpriced and useless, but they can save you money. If the amount they save you is greater than their bill, then it’s worthwhile investment.
I forgot to mention some of my income on my tax return, what do I do?
We’ve all been there – it’s easier to do than you realize. If you forget to include some income, you must complete an amended tax return form. As the name implies, this will ‘amend’ your incorrect tax return.
There are no penalties associated with this, as long as you move quickly. So be sure to do so!