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