August 2022 - EG Accountancy

We all want to make the most out of our finances, but it is difficult to know how to make your money go further. As a result of COVID-19, many people across Northern Ireland are struggling financially. At EG Accountancy, we ensure our customers make the most of their money. Therefore, we have compiled a short guide to personal budgeting in Cookstown, to maximise your savings and identify where you can spend.

Since the COVID-19 pandemic began in 2020, the UK has faced serious financial turmoil. As well as this, the Ukraine-Russia War has strained our economy, becoming the largest contributor to inflation. The inflation rate is currently the highest it has been in over 40 years, at 10.1%. This means that everyday essentials such as energy bills and petrol have skyrocketed – prices have almost tripled in some areas.

So, why should you prioritise personal budgeting?

The best way to regain control over your finances in Cookstown is to start investing time into budgeting. There is a range of benefits of personal budgeting:

You are less likely to fall into debt
You have more control over unexpected costs. As we know from the last two years, unforeseen circumstances can creep up on us at any time, and it is difficult to prepare for these. Therefore, by budgeting effectively, you will develop a ‘safety net’ in case of unexpected costs.
You are more likely to be accepted for mortgages and loans. This is because budgeting improves your credit rating, which is a measure used by lenders to decide whether you are eligible for mortgages and other loans. A good credit score tells lenders that you are more likely to pay your loans back on time.
Budgeting allows you to make more savings. This means that you can develop savings for a new car, a holiday, or whatever you are aiming towards.

Where do I start with my personal budgeting in Cookstown?

If you are beginning to invest more time in your personal budgeting, it is best to start small. This is very simple. For example, choosing to make lunch at home to avoid going out for an expensive lunch, or choosing to walk to a friend’s house to save petrol.

As well as this, you must be aware of what you are entitled to. Using an entitlement calculator, you will identify exactly how much money you will receive from the Government. This is affected by personal factors, including:

Where you live
Age and disability
Net income
Housing costs
Council tax
Benefits you currently receive

As a result of the economic downturn and the increased cost of living, the Northern Irish Government has implemented a one-off Cost of Living payment for those on income-related benefits. The main goal of these payments is to assist with the increased cost of living, which has affected many Northern Irish citizens in recent months.

Keep on top of your taxes when budgeting

Taxes can be a financial burden. There are several types of tax you are required to pay if you live in the UK. Firstly, those who are employed must pay income tax. Most people have a personal allowance, dictating what you must earn before HMRC charges income tax. However, if you are above this threshold you must pay a predetermined amount. This is dependent on your income.

Ensure you are on the correct tax code when

The tax code you are on is determined by your employer or pension to calculate how much Income Tax you are required to pay. This tax code is dictated to your employer/pension by HMRC.

It is important to ensure that you are on the correct tax code, as you can be over or undercharged if HMRC has incorrect details on your employment status. If you are on an incorrect tax code and therefore being overcharged, you are owed a tax refund. To receive the payment, you must apply for a tax refund.

EG Accountancy can help with your personal budgeting

At EG Accountancy, we have a wealth of knowledge and experience to assist you with your finances, particularly with budgeting and tax planning. We offer a 1:1 ‘Power Hour’ service. This allows you to gain clarity from a professional, and gather all the tools you need to organise your personal budgeting in Cookstown.

As well as this, we have an extensive range of knowledge of the UK tax system. Due to its complexity, the UK’s tax system is extremely daunting and can be difficult to navigate. Therefore, we offer a range of expertise on the issue of taxes. This ensures you are making the most of any available allowances, and not paying any more tax than is necessary.

For more advice or information on the personal budgeting services we offer in Cookstown, get in touch with us.

What does it mean to be self-employed in Cookstown?

Self-employment is a term for those who are considered sole traders. Ultimately, they are those who work for themselves. If you are self-employed, you are responsible for the completion of your own tax returns in Cookstown. There are many situations in which the Government and HMRC consider people self-employed, for example, if they:

Run a business
Have full control over how, when and where they work
Have the capability to hire others to assist with their work
Are the provider of equipment needed to complete work
Charge for their work
Make a profit from their goods and/or services

It is important to remember that you can be both employed and self-employed at the same time. There are many situations in which you are self-employed in Cookstown. For example, if you are employed with another business and operate a start-up company in your spare time.

Do I need to register for self-employment tax returns?

Those who are working under self-employment must inform HMRC. Without doing this, you will not be able to pay taxes. There are serious consequences for those who do not provide HMRC with explicit information on their financial situation.

How do I register for self-employment tax returns?

How you register for self-employment differs. This is dependent on whether you have previously sent a tax return to HMRC. Regardless of your situation, you must create a Government Gateway Account. This allows you to check your National Insurance contributions. As well as this, you will file, organise and calculate your taxes online through this account.

If you are self-employed and have not completed a tax return before

If you did not send a tax return last year in Cookstown, you must register for Self Assessment and Class 2 National Insurance. They are completed through your business tax account. Following completion, you will receive a letter. This includes your Unique Taxpayer Reference within 10 days.

If you have previously sent a tax return under self-employment

On the other hand, if you have previously completed a tax return you must complete tax returns differently. If you sent it to HMRC, but not last year, you must re-register for Self Assessment and Class 2 National Insurance. However, if you completed a tax return last year, you must sign into your business tax account. Following this, create a business tax account and add Self Assessment.

When following these steps, you must have the 10-digit Unique Taxpayer Reference that you received the first time you registered to complete a tax return.

What happens after I have registered as self-employed in Cookstown?

There are additional things to consider once you have officially registered as self-employed. After this, you are entirely responsible for calculating how much tax you owe annually. In addition, you must also complete Self Assessment and tax returns in Cookstown to finalise this.

You must also consider National Insurance after becoming officially registered under self-employment in Cookstown. Those who are self-employed are also responsible for the calculation and payment of their Class 2 National Insurance Contributions.

Choose EG Accountancy to assist with your self-employment tax returns in Cookstown

The UK tax system is notoriously complex, but the benefits of structuring your finances tax-efficiently can be huge. EG Accountancy in Cookstown offers a variety of compliance services. It is extremely important to ensure that your calculations, processes and procedures are accurate. Whether you are recording spending, assets, expenses or any other financial aspects of your self-employment, we can help.

We offer a range of services including:

End-of-year accounts: sole trader profit & loss balance sheets and sole trader income & expenditure accounts
Taxes: self-assessment tax returns, VAT and payroll

EG Accountancy offers these services whilst also ensuring you maximise your available allowances. Therefore, you will never pay more tax than you should. If you require assistance with registering as self-employed, let us help!

Get in touch with us today to find out what our expert finance team can do for you.

Month: August 2022

Your Guide to Personal Budgeting in Cookstown