Uber Drivers and taxation
Uber Drivers and taxation If you are working for Uber you are not considered their employees. You are working as a self employed person as you set your own working hours and you follow your own business strategies to improve your business. You will be responsible for your own taxes as well. For tax purposes you are considered self employed and you will be paying National Insurance and Income tax on all the profits that you will make. Some people tend to confuse income with profits, please note that income is all the earnings that you get as a result of the business that you are doing, in this case it is the Driving service that you are giving as an Uber Driver. However, the profit is the net income which you get after deducting all your expenses. This means that you will deduct all your costs which you incurred and it is directly related to the service that you are providing. For example, in this case one of the costs which you can deduct are the fuel costs. This net income is the taxable profit and you will pay income tax on it. When and How should I register for my taxes? You don’t have to register for a Self Assessment tax return if your income(before deducting any expenses) is less than £1000. If you exceed this threshold you will need to register for a self assessment tax return by 5th October in your business’s second tax year. As an Uber Driver what expenses can I deduct? You should make it your habit that whenever you buy something or use something for your business you should keep a record of it. You can save all the paper receipts in a box, however, you can be a bit more organized and take a picture of all the receipts and save it to your drive. If you have an accountant you can just share that file with them instead of giving them all the paper receipts. You should also enter your expenses digitally somewhere as you make them. You can either make an excel sheet and enter your expenses there or you can also use a software where you can enter your expenses. This will give you a peace of mind and it will save you lots of time when you are filing your tax return. Here is a list of expenses that you can deduct from your income: If you are an Uber Driver and you want tax advice or you want an accountant to do your taxes contact Taxaccolega and Taxaccolega self employed will ask you simple questions and do all the taxes for you.
Business Asset Disposal Relief- What you need to Know?
Business Asset Disposal Relief- What you need to know? Entrepreneurs relief which is now known as Business Asset Disposal Relief is one of the reliefs available to the business owners and the entrepreneurs when they sell the asset. If you are eligible for this relief it will help you reduce the capital gains tax that you pay on the disposal of an asset. You will only have to pay 10% on the profit that you make as a result of the disposal of a qualifying asset instead of a normal CGT which is paid at 10% or 20%. Am I eligible for the Business Asset Disposal Relief if I am a Contractor? In the following cases a contractor can qualify for Business Asset Disposal Relief: You will not qualify for business asset disposal relief if you work through an umbrella company. As a sole trader you are eligible for the reduced rate of CGT(business asset disposal relief) if you owned the asset for 2 years or more. If you are closing down your business: If you are closing down your business and you dispose of all your assets within 3 years of selling your business then you can claim the relief. For example if you are planning to sell your business in 2022, to qualify for Entrepreneurs relief you must sell all your business equipment and assets by 2025. There is no limit as to how many times you should claim the relief, you can claim it as many times as you want provided your profit does not exceed £ 1 million over your lifetime. Once you hit the £1 million cap in your life you won’t be eligible to claim Business Asset disposal relief If you are selling shares in the company you have invested in You can claim business asset disposal relief if the following applies to you: If a company goes from being a trading company to a non-trading company you will still be eligible for business asset disposal relief as long as you sell your shares within 3 years. If you are closing your business you should not be involved in the same business activity for at least 2 years otherwise HMRC might consider your profits as income distribution and you might have to pay dividend tax on it. If you are looking for an accountant in London contact Taxaccolega and our expert accountants will help you with your taxes. They have expert knowledge and they can advise you on what the most tax efficient structure to use to run your business and utilise the tax reliefs available.
I own a property – how can I reduce my Inheritance tax bill?
I own a property – how can I reduce my Inheritance tax bill? If you own a house, it is part of your estate for inheritance tax purposes and inheritance tax should be paid on it when you die at 40% however there are ways that can help reduce the tax bill. According to HMRC guidelines you do not pay inheritance tax if the following applies to you: Inheritance tax threshold Each person has a tax free allowance of £325 000. If the value of their estate at the time of their death is less than £325 000 no inheritance tax will need to be paid. Passing the house to spouse If you pass your house to your spouse ( your husbandwife ) or a civil partner, charity or a community sports club you don’t pay inheritance tax even if you do that within 7 years of dying. If you pass your home to your children or grandchildren the tax free allowance will increase from £325 000 to £500 000 and you will not have to pay inheritance tax if the total value of your estate is £500 000 or less. You can therefore reduce or avoid paying inheritance tax if the value of your estate is within the tax free allowance thresholds. You can do this by taking the following steps: Giving gifts during your lifetime If the value of your house is £325 000 or less but the value of your total estate which includes money, possessions etc exceeds this threshold you can give them away as gifts during your lifetime. HMRC has defined such gifts as exempted gifts and you have a tax free allowance of £3000 per year. If you don’t use this allowance in a particular year you can carry it forward to the next year. Giving away home before dying Even if the value of your house is more than £325 000 and you pass it to your spouse there is no inheritance tax even if you die within 7 years of giving it away. You can give the house away and continue living in it If you give the house to any of your relatives or even to your children and live for 7 years there will be no inheritance tax to pay on it. You can choose to continue living in the same property however, you will have to give rent to the new owners at the market rate and pay all the bills of the house. If the new owners are your children and they are living with you in the property you don’t have to pay rent even if you gave them a portion of your property. Giving charity If you leave 10% of your estate to charity, the inheritance tax will be paid at the reduced rate of 36% Transferring any unused nil rate band between husband and wife. If there is any unused nil rate band when one of the partners dies it can be transferred to the tax free allowance of the other partner and this can reduce the inheritance tax bill. If you own a property or you have inherited a property or you are selling your property and you want to know about the taxes don’t hesitate to call Taxaccolega and our expert team of accountants will be happy to help you. Call our accountants in croydon 020 8127 0728 or drop us a message here.
Online Tutor – What expenses can I claim and what taxes do I pay?
Online Tutor – What expenses can I claim and what taxes do I pay? If you are thinking of starting online tutoring you should be well aware of the taxes that the taxman expects you to pay. HMRC expects you to pay taxes if you are earning money above a certain threshold. These thresholds are different for different structures in which the businesses are run. From the tax point of view if you are providing the services( in this case tutoring) and earning money from it you are running a business. You can choose how you want to run the business. For example, you can register your business as a sole trader or you can register your business as a company. Both business structures will have different thresholds, different tax rates and different deadlines. If you choose to run your business as a Sole Trader If you chose to run your business as a sole trader you would have to register as a sole trader with HMRC. You are required to register to submit your self assessment tax return if you have earned more than £1000 in a particular tax year. You can register by following the link here .You will receive your 10 digit UTR number which you will need for when you will be filing your self assessment tax return. You can do it online before the deadline 31 Jan or you can submit your paper return before 31 Oct of the following year in which you started your business. You should keep proper records of your income and expenses such as bank records, receipts, record of your bills etc. This is to make sure that when you state your profits and expenses you have proper records to back that information. Income Income will include all the tuition fees received during the tax year. You might have some defaulters. We will include only the income received and not the income which is due to be received although you have incurred the related expenses, this means that your tax bill would be a little understated in one particular year although tax on that income can be charged in the following year. If you receive any security you should not consider it as your income, it is your liability which you need to return according to the set terms of the contract. Expenses that you can claim There are certain costs that you can claim as allowable expenses. This means that you can deduct these expenses from your income which can help reduce your tax bill. If you are tutoring online you can claim the following expenses: The taxes that you have to pay As a sole trader you pay the following taxes: For more information on how to set up a company contact our accountants at Taxaccolega at 020 8127 0728 and they can guide you on setting up the company and related taxes.
