The Tax Bite
Today is the deadline for reporting and paying "Self Assessment" tax here in the UK. As a self employed person, and a die-hard procrastinator, I will be doing both today haha. I always leave things to the very last minute. For the past 5 years, I've reported and paid on the very last day. During Covid, when we were granted a couple of months' extension, I reported on the final day of the extension 😂
Tax is a necessary evil. It's as old as record-keeping. In fact some of the earliest records ever found were of taxes. Some have even speculated that the record-keeping, which eventually led to script, was kicked off to ensure people paid the correct tax: as far back as Ancient Egypt and Sumer.
As a self-employed person I'm very aware and in touch of how much of my income goes to the government. I see the income, it looks great, and then I remember "ah, only a portion of it is mine" haha. I will be paying more tax this tax year because the government reduced to the threshold (allowance) by quite a lot! The specific numbers can be found on the HMRC website but it means I'm having to pay more tax.
I always imagine my capital gains, the realised ones that is, as an apple or bagel, or any piece of food for that matter, with a large bite taken out of it. That bite, the missing piece, is the tax. This year the bite is a little bigger than before and I fear it will increase going forward. Mind you, the actual apple/bagel itself has also shrunk in size so the overall amount of food intake is dramatically reduced. 😅
Thankfully the tax year in question hasn't produced too much capital gains I have to worry about. In fact I probably made a loss, which I also have to report. I also need to get better at documenting expenses, which I hardly ever claim. Most self-employed folks don't claim all their expenses and, by definition, pay too much tax. I have devised a better record keeping system, quite a primitive one actually involving paper, pen and envelope, haha, that will help me reduce next year's tax by claiming expenses and accurately as possible. Lets see what happens.
Peace & Love,
Adé
Taxes are a fact of life. I don't object to paying and hope it's used well. I object to really rich people avoiding paying. They can afford to and still live well. Lots of people have to spend all their money on essentials and have little left over.
I've not had to do my own taxes for a while, but I expect there are tools to help. You need to get yours sorted.
I've got the payment bit sorted, it's the expenses bit that needs a lot of work haha.
Such a ever present yet controverse topic if you think about it more deeply? What tax is usefull? What tax is fair? Is taxing double and triple on the same money amount fair? Like Capital gain tax on income Money invested you already paid tax on.
And then we pay VAT on top of all of that 😢
😂🤝🏻🤷🏼♂️
You've just reminded of the days when I had a fat envelope for every month with all the receipts in it - just for expenses!
My sister does that, and I've started doing it too :)