self-assessment in the UK: tax form, software
Thread poster: Anne Lee

Anne Lee  Identity Verified
United Kingdom
Local time: 10:42
Member (2003)
Dutch to English
+ ...
Aug 11, 2009

The aspect I struggle with each year, is doing my accounts prior to completing my tax form. I guess keeping on top of receipts & records is a matter of discipline. Granted, I am not too keen on that job, which is why all my receipts & records are stuffed on one shelf which may succumb under the weight any day now.... Thank goodness that small freelancers can opt out of VAT registration in the UK. But if there is any helpful info out there specifically for translators/interpreters, in relation to completing the annual self-employment assessment form for Inland Revenue, I would be glad to know where. I have checked all the info on the Inland Revenue website, but it would still be helpful to get something more specific. I have always had to resort to my own spreadsheets and calculations of the previous year to remember how it is supposed to be done. I keep records of all my outgoings (stationery, professional fees, professional memberships, mileage, IT equipment, proportion of my broadband costs) but I feel caught out each year by the way I am supposed to add them up into categories of allowable expenses. Since I'm not an agency and rarely subcontract work, anything too complicated would probably be surplus to my requirements.

 

Peter Linton  Identity Verified
Local time: 10:42
Swedish to English
+ ...
Tax doesn't have to be taxing . . . Aug 11, 2009

My solution to this tax problem is itself quite complex, but seems to work well. Basically, the steps are:
1. Software to keep track of customers, jobs, invoices, payments etc. I use Translation Office 3000.
2. In TO 3000 I can extract details of all income during the tax year into an export file.
3. I copy the details from the export file (date, customer, amount received etc) into a spreadsheet.
4. I create separate sheets in the spreadsheet for expenses for each month.
5. A separate page in the spreadsheet provides totals of all my income and expenditure for the tax year.
6. I use special tax return software called TaxCalc. This has several advantages:

TaxCalc looks like an electronic version of a paper tax return. It also has very comprehensive help information about things like claimable expenses. I fill in the details from my spreadsheet, and TaxCalc checks my figures for consistency, and it tells me how much tax I have to pay.

At this stage I usually print out my return and take it to an accountant to be checked. Because I have done most of the work already, this usually takes only 20-30 minutes, and costs correspondingly less. In fact, the last couple of years two accountants have refused payment But don't bank on that.

If you have registered well in advance with HMRC, you can get a username and password which enables TaxCalc to file your return electronically. This goes direct to HMRC, and several minutes later you will get an acceptance or rejection. This is a very secure and quick way of filing your return, though it is of course best to avoid doing so on Jan 30 or 31, when everyone else is trying to do the same.

As you can see, it is quite complex, but the advantage I find is that it gives me a very clear view of my financial situation. You seem to be well on the way with your records.

Expenses: I have been to a couple of talks by HMRC staff arranged by the ITI. There are no special issues that apply specifically to translators or interpreters. The general rule is that you can claim any expenses that enable you to run your business better. But the expenses need to be strictly for professional purposes. So the best advice is not to mix business with pleasure. For example, if you go to a relevant professional conference abroad for translators/interpreters, all your reasonable expenses are chargeable. But if you then spend a week on the beach with friends, a tax inspector might think the conference was just an excuse, and disallow all the expenses.


 

Anne Lee  Identity Verified
United Kingdom
Local time: 10:42
Member (2003)
Dutch to English
+ ...
TOPIC STARTER
Will try the software. Aug 11, 2009

Thanks, Peter. I was unaware of Translation Suite 3000 but will give it a try. Will also check out TaxCalc. I tried Fasttax before, but could not get on with it at all. I suppose I have to find a programme that feels right for me, similarly to different translators swearing by different CAT tools, depending on the type of layout or information you prefer to see on the screen.

 


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