“Are you serious about this? Then get an accountant.”
– Hilary Mantel’s top tip for writing.
People really do wang on about doing their tax returns, especially in creative circles. The way people talk about it, you’d think you had to fill out the form in Russian, in triplicate, halfway up Everest.
As a consequence of all this fuss, when I came to do my first ever tax return last year, I was TERRIFIED. Proper, waking up at night in tears frightened. Mainly I was worried that –
I wouldn’t be able to do it
It would take a million hours
I would fuck it up
I would owe the government shitloads of money and that would make me a Bad Person and a hypocrite because of all my anti-cuts activism etc
I would ultimately get arrested and go to prison due to tax evasion. Like Al Capone.
None of these things happened.
Obviously, tax isn’t the most interesting thing you’ll do as a writer, but what no one tells you about paying tax on your standard yes-I-have-a-day-job-but-I-earn-some-bucks-on-the-side project is, it really isn’t that hard. This year I did my tax return in the space of two hours, while watching Netflix. Granted, I am a poet, so I do not make very much money. But I think maybe some of you, dear readers, are in the same position. So for your delectation, here are my Top Tax Tips. I hope you are enjoying my super sexy new year’s blogging.
What Exactly Happens?
You go online and log on to a government website. You fill out a long online form which asks you a long list of very specific questions which are mostly irrelevant to you, such as “are you a share fisherman?”. The most important of these questions is “how much did you earn and spend on your business last year?”. You need to find a load of bits of paper because they will also ask you how much interest you paid, what contributions you made to your student loans, how much tax you paid through your day job, etc etc etc. The bits of paper are the hardest bit. At the end of the form, it tells you how much tax you owe. You pay it. That’s it.
Keeping Records, Somehow
Every year I resolve to keep my income and expenditure records properly. I make a spreadsheet on my phone, and find a special pouch to keep my receipts in, and promise myself that every month, minimum, I’ll update both of them and print and copy everything and put it in my tax folder and blah blah blah. I have never ever ever done any of this though. What I actually do is search the word “invoice” in my email records to get my income and collect together the receipts of any claimable expenses as long as a) I remember buying them and b) I bought them online, because if I got it IRL I’ll have lost it already. This actually works fine for me, as I never earn any money other than through invoicing and as for the expenses… meh. I don’t care if I over pay my tax a little bit. Your system can (should) be different to mine, but you have to have one.
The first ever time you do your taxes, two things need to happen – you have to register as self employed and you have to register separately with their online portal. This involves requesting a code and waiting to have it delivered to you POSTALLY, which can take like a month. So get cracking on all of this pretty much the end of the first tax year you earnt anything
BUT NOTE. I didn’t follow this advice at all and phoned the helpline in tears on the 20th of January having realised I had no time to do any of this. And it was actually fine and I didn’t get fined. Which brings me to –
Ask for Help
I phoned the tax people twice, for clarification on things I had found confusing/because I thought I had cocked it all up. On both occasions it took the best part of a lunch hour to get the information I want and I found it pretty stressful. On both occasions they completely resolved my problem, once by telling me that I could have a deadline extension because I was new and once by telling me that the fee I’d called to query had already been cancelled. I’m not going to pretend that it’s not as unpleasant as being on hold to any other organisation, but I will say that their lines are staffed by real people, and they want help you pay your tax because of course they do.
Should you get an Accountant?
If you earn your living through your work, yes sure probably, unless you’re above average with admin. They’ll probably save you more than you pay them, if your income is over a couple of grand. But what I would maybe suggest is to not expect an accountant to make it all go away. 90% of dealing with tax returns is working out how much you spent and earnt through various means. You still have to do that if you have help – they won’t automatically know.
As long as you pay at least enough tax, no one is going to have any beef with you. So if you have to estimate anything, just over estimate it and you’re fine. Chuck yourself into it and have a crack, and if you mess it up, phone and get help.