JCT

#3 Avoid paying tax

In Homeworking on October 13, 2009 at 4:52 pm

Of course, if you aren’t earning any money, there’s nothing to pay tax on. Indeed, they might end up paying you. More likely, you’ll find yourself in that time-warp scenario where you end up paying back money they gave you one year when you were poor because the next year, you weren’t, even though the year after, when they actually ask you to pay, you’re poor again. It’s why I haven’t re-registered for the Working Families Tax Credit – they’re just waiting to catch you out.

Perhaps you actually listened to your accountant when they told you to put aside a certain percentage of everything you’ve earnt each time you earnt it so that you could not only be sure of having the funds to pay your tax but, in more buoyant times, might even have earnt some interest on the savings account, thus financing a nice little holiday at the end of it as a reward for being one of the most anal people on the planet.

No, of course you didn’t. No one does. Just as no one actually fills in their tax return on the 7th of April while it’s all fresh in their mind and they still know where their receipts are. Not even if they don’t have any actual paid work to get in the way of such administrative tasks. We all avoid even thinking about paying tax until we actually have to. It’s human nature. But, at the end of this month, we can avoid it no longer. At least if we want to submit an old fashioned paper form.

This year many people have ditched the accountant we can no longer afford and are flying solo, threatening to crash the Inland Revenue website with our simultaneous eleventh-hour panic requests for forms and facts. A virtual flash-mob of the self-employed. Or a mass Hallowe’en party – the date can hardly be coincidental. One of the most frightening prospects of the year arranged to coincide with the a Celtic festival originally symbolising the end of summer and the onset of winter, and a time when evil spirits are thought to be especially active. Winter. Evil spirits. Indeed. One can almost hear the ghoulish cackling of low-grade civil servants that must echo around the offices of IR Salford at this time of year. The added frisson of the postal strike will, for anyone who doesn’t live near their local tax office or even know where it is, add an extra chill. Plus the 31st is a Saturday. And no, the IR don’t care and aren’t accepting late forms unless you can really argue your case on appeal. (You can buy yourself three more months by filing online at https://online.hmrc.gov.uk… but even then you have to wait for them to post you a  User ID and Activation PIN to arrive.) Luckily personal finance journalists are grinding out advice for the rest of us saps. You can have your hand held at, for instance, www.telegraph.co.uk or news.bbc.co.uk

However many articles you read, the question of what you can actually claim against tax is never properly resolved. Some would urge caution at even claiming for a proportion of your household utility bills; others say go for anything you think you can get away with. The Guardian says meals away from home when you’re out on a job are fair game; my (ex-)accountant says otherwise. As with my approach to the similarly broad spectrum of advice given on how much wine it’s OK to drink while pregnant, I’m cherry picking whichever bit suits my needs at any particular time.

But what happens when remuneration no longer takes a monetary form? Magazines, newspapers and websites have become increasingly reluctant to cough up hard cash, and instead see what you’ll do in exchange for a few treats; this summer I’ve traded time and skills in exchange for free books, audioCDs, food and alcohol. Add to this mutually beneficial arrangements involving babysitting, house swaps, and passing on cast-offs, and it all starts to look very un-capitalist. Totting this up so far, next year I’ll probably owe the Revenue the sleeve of a school sweatshirt, a lift to trampolining, the Central London section of a Time Out guide book, and an organic pork pie.

I wonder if I can pay that online…

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