Newly self-employed

Are you newly self-employed? You may not have to pay your first tax bill until 22 months after you started your business and HMRC has recently published a new leaflet to help budget for this. Based on estimated earnings it shows the amount that should be set aside each week or month – for example, if weekly profits are £500 then you should set aside £104. However, this guidance, although helpful, ignores the payment on account that is likely to be due at the same time for the following year. The first tax bill will then be 50% higher – £156 instead of £104.