Resolutions for 2017?

[rth_discos]

Well if you are going to be taxed on £10k it'll cost you £2k leaving you with £8k.
If you still have the £10k and buy something which likely can make you more money or won't depreicete you've saved £2k ... for now!

No, if you spend £2k, then you're left with £8k profit to be taxed on, which means you still have to pay £1,600 in tax, so you're now left with £6.4k.

[ukpartydj]

No, if you spend £2k, then you're left with £8k profit to be taxed on, which means you still have to pay £1,600 in tax, so you're now left with £6.4k.

I meant spend £10k, not £2k.

[rth_discos]

I meant spend £10k, not £2k.

If I spent £10k of money, I'd be wanting that to bring a significant return on investment in the following year, and therefore a BIG tax bill the following year.

If you're going this every year, where's the profit? And therefore, what's the point in working hard all year?

[ukpartydj]

If I spent £10k of money, I'd be wanting that to bring a significant return on investment in the following year, and therefore a BIG tax bill the following year.

If you're going this every year, where's the profit? And therefore, what's the point in working hard all year?

You're not wrong, it just depends on your goals. If the money isn't doing anything I'd rather invest it in something, save on tax and have something which can make money rather than stick it in the bank and earn bugger all interest and pay tax on it.

If you don't want to expand your business then not much point investing.

[Jim - Scotland's Party DJ]

You're not wrong, it just depends on your goals. If the money isn't doing anything I'd rather invest it in something, save on tax and have something which can make money rather than stick it in the bank and earn bugger all interest and pay tax on it.

If you don't want to expand your business then not much point investing.

The money keeps me in hot tub chemicals and nice holidays.

[mattydj50]

Tax is like death. Its going to happen, and you know its going to happen.

So, you can forecast, based on your projected income and expenditure, how much tax you will be expecting to opay each year. HMRC do too, that's why they have the two advance payments for each year. Its more likely to be the balancing payments that come as a bit of a surprise, but, if you can keep your accounts up ro date, then a rollong P&L, plus a rolling cash flow forecast should see you through.

As i have a full time day job, all of my DJ income is taxable so I can deal with it in this way.

Each month, I squirrel away a sum of money, based on my income for that month into a separate bank account called "tax fund". I always over egg so I cover myself. When I make a bigg(ish) purchase, I don't take money out of that account, so, once the P&L is done for the year, there ought to be enough saved away to more than cover the tax liability.

Now, I was lucky. The "day" company I work for saw it fit to send me on an accounting course back in 1993 which, I'm proud to say, that I passed the 3 year course with distinction, so I do have an advantage in the financial world, though I don't claim to be an expert and cannot offer financial advice, other than generalisation from experience.

My qualification (NVQ4) has now lapsed, and certain practices and rates have changed, but the general rules remain the same. Be prudent. Always err on the "right" side and account for everything.

If you have doubts about managing tax, find a recommended accountant and ask for advice. Its surprising how they can often save you their fee by some simple accounting techniques - legal I would add. HMRC can also advise on Tax Matters and have recently been offering on line seminars. My stepdaughter said her's (she runs her own hair salon) was very useful.

There are two ways of reducing your tax bill. Tax avoidance, which is legal, and tax evasion, which isn't.

My wife, through ill health, no longer works, so we have "invested" in the HMRC Marriage Allowance, details can be found here: Marriage Allowance - How it works

Saves us a few quid each year.