Thursday 27 January 2011

Tax doesn't have to be taxing...

 Mixed Media Cigar Box Assemblage (covered in old tax tables) by homespunireland

One of the big dates in the life of a self-employed person in Northern Ireland (and the UK) is the 31 January, which is your deadline for filling in your tax return online. You also have to pay any tax owed before the deadline. Unless you can afford an accountant, it's up to you to do your tax self-assessment. If you miss said deadline, a £100 fine is looming, so you better get your scates on!

Help Yourself, print by meluseena

If you want to do a paper return, the deadline is the previous 31 October. I have never done a paper return, because I once looked at the forms and my mind went totally blank. So I decided to check out the online version, which I found much easier to use than going through endless pages of tick boxes and other boxes and lines. You can tailor the online pages to your needs, so you don't have to wade through endless pages that you don't need. The online version also 'tells' you (in red!) if you make a mistake or forget to tick a box. Even better, it does the calculations for you!

Happy Days!

What you need to do is to register with HM Revenue & Customs online, and this nifty page tells you all about it.

I have filled in tax returns as a self-employed IT freelancer for the last three years and I find it difficult, although it does get easier with practise. Last year, I rang the helpline, and then made a big blunder and had to ring again! At least, I won't make that specific mistake again! I have to admit I am no natural in calculating my expenses and also lack the patience to work things out slowly.

This year was the big one - I did my first return for Purls of Colour!

In a previous business course, we were told to keep meticulous records for the taxman (or woman). A simple way of keeping receipts is to have an envelope for every month, and stick the receipts in there. Sounded easy enough, and keen and eager, I even bought myself a single cash book to be fully organised.

Well, I have to admit, it never happened.

Receipts were stuffed into one big envelope, and the single cash book was left blank - I rather scribbled the amount of anything I bought and forgot to ask for a receipt on bits of torn envelope, which were also stuffed in said big envelope, and I never added up how much yarn I really bought...

Don't do this at home!

So, came January this year, I spent two weeks trying to recreate records I should have had in the first place. At least I knew from experience not to do the tax return last minute (ie this week), because if you do it during the last few days of January, the website gets so busy, it is bound to crash, and probably just when you are ready to press the 'submit your return' button on January 31! So I started at the beginning of the month, and was soon chasing receipts, bank statements, Etsy purchases, orders and notes, trying to make sense of it all.

It wasn't pretty...

I was moaning constantly on Twitter about it...

I needed a lot of coffee!

Arabian Coffee Pot, Etching by bridgetfarmerprints

I realised that my sloppiness in keeping records wasn't just bad for the tax return, but also for me. I had no idea of the value of my stock (which I should know for insurance purposes), no idea how much I had spent in the last year, and was even surprised to find I had had more sales and income than I had thought!

Basically, if I had kept my records at least reasonably meticulous, I could have had a much easier time with the tax return. In fact, once I had everything worked out on a big excel sheet, it didn't take me that long to do my self-assessment.

So, my conclusion really doesn't have to be taxing, if you've done your homework throughout the year!

Me culpa!

So from now on (and I hope I am not eating my words next January), I will take a look at my income and expenses at the end of each month, and will dutifully put it on that excel sheet. I'll keep those pesky books in order, and fill those envelopes with receipts every month! And then I will pat myself on my back and tell myself:

You're Magic, letterpress greeting card by theletterboxpress

I might even treat myself to a nice handmade box on Etsy for those envelopes!

Now all I need is some magic to stop me from spending too much money on yarns and fibre, because although I know now the value of my considerable yarn stock, there is still the strong pull of more!

A small selection of my yarn stash, the yarn in the picture is by lindsaycrafts

(I have no idea how tax returns are done in the south of Ireland, so if anybody wants to write a blog article about it, you are very welcome!)


  1. Brilliant post Purls .... love it :D One of my all time fave scenes is from "Black Books" where he has to do his own tax returns. It Hits a lot of feelings right on the head! brilliant ... loved this reading too :D

  2. Oh what a great article thanks Purls! I'm so dreading tax returns :( Would be great if anyone could write something about how they're done in the south?

    Nicola x

  3. You are such a fun writer Brigitte!

    Groan, my guilty gene was buzzing as I was reading this, since I just went full time at Nice Day Designs I have to start doing all this now...have I recorded anything yet, no of coarse not...oh I'm gonna regret that

  4. How do you manage to make such a boring, nasty subject such as tax so entertaining and light hearted Purls? You're very talented with words as well as wool :-)

  5. Thanks! :)
    Ruth, my guilty gene (love that expression!) is buzzing very loudly now, since I bought more fibre and a bigger spindle yesterday! My excuse is 'it's for the business', but still...


    It'll go on that excel sheet, ugh ugh, and I see the list of purchases against the empty rows in income...argh!

    (But I am soooo looking forward to the arrival of the goodies and the new spindle *cough*)