Dumb noob question - turnover ?

[DeadKenny]

Err, right. Okay. Nevermind.

[Nixon Williams]

"The estimates are so they can get some idea how big the company is, there are no penalties for under/over estimating your turnover when you apply for VAT etc."

Spoilsport.

Sorry, but I did check, it is not April 1st!

[MarillionFan]

"The estimates are so they can get some idea how big the company is, there are no penalties for under/over estimating your turnover when you apply for VAT etc."

Spoilsport.

[Nixon Williams]

Thanks.

What happens if your turnover is over or under the estimate? Just talking here about if you work more or less hours than expected.

Also do you have to update HMR&C and/or the insurance companies should the turnover change, or is it only if it it goes over or under certain values?

By all means advise your insurance company but there is no need to advsie the Revenue/VAT etc. The estimates are so they can get some idea how big the company is, there are no penalties for under/over estimating your turnover when you apply for VAT etc.

Alan

[Buffoon]

Buffoon. Do you remember that link to the Inland Revenue guide to forecasting?

Sorry, I can’t. When I go to the website they say that there is a link. But it’s broken. It’s OK up to the part when it goes on about how non-EU workers can claim subsidies to bring them up to EU rates when they undercharge, but the bit about penalties for British people over performing doesn’t work.

[ASB]

Can you update the estimate during the year though?

e.g. say you're on a particular contract at a particular rate for 3 or 6 months and then later get a contract that's a substantially higher or lower rate? After all it only takes a few £ per hour difference to change your expected by 5% or more.

Surely if you were selling goods you'd might a hard time estimating not knowing on how much you'd really sell?

Or is the best advice to just not vary your rates by enough to tip it over? (and I assume you provide an estimate each year then, or do you have to VAT register annually?).

Anyway, that link sounds useful though if you've got it.

From the POV of the bank, it's part of thier underwriting process. Accuracy of those figures may or may may not be a condition of any agreements you enter into. Ultimately 1500 x hourly rate is probably a reasonable initial guess.

from the POV of "the authorities" you have certain responsibilites. They don't like change and material differences.

The VAT man for example considers it polite if you mention that things are afoot and you are changing from a single man consultant outfit to a huge import export operation. If you mention it it might stop a vist and possible hassle of getting things wrong.

Hector tends to get curious if your paye declarations constantly change against an established pattern.

All the bank are doing is trying to figure out what class of customer you might be.

[DeadKenny]

Can you update the estimate during the year though?

e.g. say you're on a particular contract at a particular rate for 3 or 6 months and then later get a contract that's a substantially higher or lower rate? After all it only takes a few £ per hour difference to change your expected by 5% or more.

Surely if you were selling goods you'd might a hard time estimating not knowing on how much you'd really sell?

Or is the best advice to just not vary your rates by enough to tip it over? (and I assume you provide an estimate each year then, or do you have to VAT register annually?).

Anyway, that link sounds useful though if you've got it.

[MarillionFan]

"Everything over your estimate goes to the government. Plus you have to pay a £500 (+vat) fixed penalty fine for filing false documents."

Yeh. Sorry forgot to mention the penalty fine.

If you find yourself going over, probably best to just quit your contract and sit at home.

Buffoon. Do you remember that link to the Inland Revenue guide to forecasting?

[Buffoon]

Everything over your estimate goes to the government. Plus you have to pay a £500 (+vat) fixed penalty fine for filing false documents.

[MarillionFan]

"What happens if your turnover is over or under the estimate? Just talking here about if you work more or less hours than expected."

If you are within 5% of your initial estimate this is fine. If you are between 5-15% they send you a letter and ask you to pop in at your convienance. I believe 15-30% warrants a visit from Hector, anything else and you're really in the tulip.

[Gonzo]

Thanks.

What happens if your turnover is over or under the estimate? Just talking here about if you work more or less hours than expected.

Also do you have to update HMR&C and/or the insurance companies should the turnover change, or is it only if it it goes over or under certain values?

I would only worry if turnover rises to a point that the insurance premium would be higher (easy to work out if the insurer quotes a number of rates based on bands of turnover). In which case I would talk to the insurer.

The others I wouldn't worry about.

[DeadKenny]

Thanks.

What happens if your turnover is over or under the estimate? Just talking here about if you work more or less hours than expected.

Also do you have to update HMR&C and/or the insurance companies should the turnover change, or is it only if it it goes over or under certain values?

[malvolio]

Yep, that's about it. Ignore VAT, that's not yours.

[DeadKenny]

I know it's basic accountancy stuff but I want to make sure I'm not making a mistake...

Filling in the forms for bank account, vat registration and the various insurances and they all ask stuff essentially about my estimated turnover.

How do I go about calculating that?

Is it just a case of taking the typical hourly rate on your contracts multiplied by how many hours you expect to work in a year?

Assuming you do no other business sales.