UK Tax Payers - My Accountant is Shit and I Need Tax Advice!

[Sashacurves]

For anyone in the UK who does their self-assessment, do you know whether we should be VAT registered and charging our customers VAT?

(TLDR)
My accountant told me 2 months too late (despite him knowing that this would be the case) that I'm over the threshold for paying VAT and has advised me to register for VAT ASAP.

As I'm going through the process online, it asks you to classify your goods/services and of course, nothing sex-work related is listed so you kind of have to guess which category they come under. But some categories that cam/clip/fansite work *could* come under are VAT exempt and others aren't. So which do you pick?

My accountant apparently only works with clients who do Onlyfans and nothing else so he's advised me to also reach out to all the sites I work on and check how their VAT process works. But before I do that, I want to make sure I even actually do have to be VAT registered!

Please help, I'm suspicious my accountant is either just after extra money or doesn't know what he's doing! (He's still not done my self-assessment from 6th April yet even though I've paid so he's got me doubting him now lol)

 

[SMuser69]

Your accountant is correct. OF didn't want to cover the complete VAT for UK creators after they lost a lawsuit so they created a 'pass the buck' model in the UK that you have to pay VAT on your 80%. It's listed here

So yes you have to file for VAT and they'll send you a bill for 20% of $85k.

 

[LaceyRoyce]

You know i think us taxes are a pain but this sounds fucking nightmarish

 

[Sashacurves]

Your accountant is correct. OF didn't want to cover the complete VAT for UK creators after they lost a lawsuit so they created a 'pass the buck' model in the UK that you have to pay VAT on your 80%. It's listed here

So yes you have to file for VAT and they'll send you a bill for 20% of $85k.

Thank you so much for the link and for the reassurance. I feel like I was being a little harsh on my accountant there, I'm just stressed haha

 

[Slapstick]

Clearly the simplest solution is to not make so much money. That would be waaaay easier than dealing with OF and their VAT handling.

And it is interesting this is only for UK residents. Is this another consequence of Brexit?

 

[Sashacurves]

Clearly the simplest solution is to not make so much money. That would be waaaay easier than dealing with OF and their VAT handling.

And it is interesting this is only for UK residents. Is this another consequence of Brexit?

Haha to be honest I thought I'd shared this to the models only section, feel a bit stupid for discussing my earnings here but the point still stands tax is so damn complicated and I have no idea if it's just the UK or also EU. Then there's the whole "you'll save loads of money being a limited company instead of a sole trader" advice that I see everywhere but have never understood the details of. Why don't they teach this important shit in school lol

 

[RuthStrawberryblonde]

Haha to be honest I thought I'd shared this to the models only section, feel a bit stupid for discussing my earnings here but the point still stands tax is so damn complicated and I have no idea if it's just the UK or also EU. Then there's the whole "you'll save loads of money being a limited company instead of a sole trader" advice that I see everywhere but have never understood the details of. Why don't they teach this important shit in school lol

During the pandemic depending on exact status those who saved money by being a limited company, lost out on self-employed support. There are pros and cons.

 

[Sashacurves]

During the pandemic depending on exact status those who saved money by being a limited company, lost out on self-employed support. There are pros and cons.

Ah ok that's a good point. Supposedly its overall safer though because you're not fully liable as an individual right? I guess that doesnt matter so much in our industry as we can't really get ourselves into debt over our company outgoings being higher than incomings as easily. If I'm understanding correctly the long and short of ltd company is you pay yourself a low wage so the tax is low, then you pay yourself the rest as dividends which get taxed at the ltd company rate? I don't know if this is something I should speak to a financial advisor instead of an accountant about, I don't know how best to learn!

 

[LaceyRoyce]

Haha to be honest I thought I'd shared this to the models only section, feel a bit stupid for discussing my earnings here but the point still stands tax is so damn complicated and I have no idea if it's just the UK or also EU. Then there's the whole "you'll save loads of money being a limited company instead of a sole trader" advice that I see everywhere but have never understood the details of. Why don't they teach this important shit in school lol

Maybe @AmberCutie could remove that bit for you?

 

[Sashacurves]

Maybe @AmberCutie could remove that bit for you?

Yeah tbh I'd appreciate if you could @AmberCutie but no big deal if not, it's kind of implied by having this discussion anyway!

 

[Sashacurves]

Oh you already did thank you!!

 

[Slapstick]

Maybe @AmberCutie could remove that bit for you?

Maybe @AmberCutie could remove it from the quote in my reply as well?

 

[AmberCutie]

Maybe @AmberCutie could remove it from the quote in my reply as well?

ah thank you, will do!

 

[RuthStrawberryblonde]

Sasha I'm just wondering are you aware although some do it sooner many self-employed in the UK don't finalise or submit their tax return until literally the last minute e.g. close to the deadline of 31st January the following year? Tax year 22/23 doesn't have to be submitted until January 2024, have you specifically instructed your accountant to prepare yours now, and given him a date for the submission?

 

[Sashacurves]

Sasha I'm just wondering are you aware although some do it sooner many self-employed in the UK don't finalise or submit their tax return until literally the last minute e.g. close to the deadline of 31st January the following year? Tax year 22/23 doesn't have to be submitted until January 2024, have you specifically instructed your accountant to prepare yours now, and given him a date for the submission?

I know the tax return itself isn't urgent but we had discussed him getting it done by the end of April because of the VAT thing. Basically we hadn't come to a final calculation of profits/expenses and profits were nearing the VAT threshold so wanted to get a final value to know for sure if I'd gone over. Still not sure, but I think I had gone over. But rolling it over so that the last 12 months now includes April, I'm definitely over and I know they only give you a few weeks to register after you've gone over before you're subject to a potential penalty.

Also my POA for July is very low because my first year in this industry wasn't a full year and I was very casual working not many hours, so my earnings have increased more than I declared they would as I became more serious about this career. My accountant told me that would mean I need to supplement that POA payment to avoid getting charged interest/another penalty (not too sure how that works) but if so, I've got to make sure I have funds available for making a substantial payment in July.

So I am probably over stressing a little but I do think it's quite urgent!