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There's no incentive to run a small business or be self employed is there? My monthly earnings are probably less than the national minimum wage and I quite often work longer hours than a great deal of people; 80 to 90 hours a week isn't unusual for me. Although the time is spent at a computer and it's not physically demanding, it leaves very little time to get out and about and enjoy life. I'm not complaining about the hours I work, because I really enjoy what I do and don't consider it work as such. Besides, it was my choice to take this on and leave the security of a 9 to 5 so I've made my bed so to speak.
What I am complaining about is the lack of tax breaks for small businesses like mine that are struggling to survive. You would think that the government would do everything they can to help the little man in the street with a view to reaping the benefits of more tax as the business grows. Apparently not though, because we're milked just as hard as the rest of the herd.
Believe me, the whole 10p tax thing is going to hit me very hard indeed. I'm not one for dodging my tax and national insurance responsibilities but it does seem that have to pay rather a lot. It's almost not worth trying to run a business at this level. I'm sure I'd be okay if I was raking in more than 10 grand a year but I'm not. I live very frugally and as my business is less than two years old I haven't been able to put much money aside for the tax man. If I had, I'd have been in the red a long time ago with banks and credit card companies knocking on my door. As it is, I'm sailing very close to the wind.
Having submitted my tax return this year (no, I don't cook the books - too honest), I've been landed a bill that I will struggle to pay. In fact I will probably have to use a credit card to do it and I'm going to have to seek some extra employment to be able to pay that off.
The reason my tax bill is so high is because the class 4 National Insurance portion is much higher than expected. I had calculated my tax and knew what to expect. It was always going to be tough but I thought I could manage that, however I had no idea that the NI contributions were going to be as high (how do they calculate class 4 NI contributions anyway?). Furthermore, the Inland Revenue wish to charge me an estimate (approximately the same again) for next year's tax bill. How thoughtful of them. Basically my tax bill is going to be 2 or 3 times what I earn on any given month.
What do I do? Should I just jack the whole self employed thing in and claim benefits whilst looking for a nine to five? I'm sure I'd be much better off, there again there's not much work around at the moment, especially as we're heading for (or in) a recession. Workers are being laid off left right and centre.
I really do think that the personal allowance should be raised to something reasonable. The current level is way too low and it doesn't really give self employed people at the very bottom much of a fighting chance. As someone once said - at least Dick Turpin wore a mask before he robbed you!
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As a self employed person fro the last 12 years it does feel like you are working for the inland revenue as yet another VAT bill becomes due. If it's not VAT that's due, it's income tax, or PAYE & NIC for your staff. In these difficult financial times, I look around my local town and wonder if it's worth it. Local businesses closing down at an alarming rate, an increase in £1 shops & charity shops, reduced margins.My job satisfaction has long gone.
Like the man said though, is your business profitable enough to carry on with?
The worst thing you can do, is pay your bills with a credit card!
You may as well go bankrupt now and save yourself the grief, if you go down that road!!
100bollocks