Self Assesment for beginners
Discussion
My other half started her own business last year and while it'll never make her rich, it's ticking along. I've been nominated as the company accountant. I've looked through the self assessment site and it all looks straight forward enough. I'm just about to complete and send the information through, but should I have put info in the wrong box or made an obvious mistake what are the consequences. A polite 'put this right' from HMIC or a nasty threatening letter.
(It's a very small business and she is likely to fall below the tax threshold after expenses etc)
(It's a very small business and she is likely to fall below the tax threshold after expenses etc)
HMRC have no legal power to "accept" telephoned details that they have already requested to be processed through Self Assessment. If you try this and ignore the Self Assessment, you could be looking at a penalty of £1,300 by this time next year.
Are you claiming all the costs and allowances that a business is entitled to claim?
Are you claiming Capital Allowances for equipment and assets used in the business?
The option to have tax collected through a PAYE coding is only open to those who have another source of income that is taxed under the PAYE system (such as an employment or a pension).
Most sole traders do not have that option. It is an option with mixed blessings anyway. Most of my clients who have that option prefer to pay whatever taxes they owe directly (and claim refunds directly too) rather than have their PAYE codes messed about with.
Are you claiming all the costs and allowances that a business is entitled to claim?
Are you claiming Capital Allowances for equipment and assets used in the business?
The option to have tax collected through a PAYE coding is only open to those who have another source of income that is taxed under the PAYE system (such as an employment or a pension).
Most sole traders do not have that option. It is an option with mixed blessings anyway. Most of my clients who have that option prefer to pay whatever taxes they owe directly (and claim refunds directly too) rather than have their PAYE codes messed about with.
Edited by Eric Mc on Tuesday 8th January 14:47
essayer said:
Doesn't Self Assessment need to be submitted by 31st Dec to deduct via your tax code, in any case?
If after 31 December, it will appear in the FOLLOWING year's tax codei.e. an under/over-payment for tax year 11/12 will amend your 13/14 Coding rather than the curent 12/13 Coding.
It can all get a bit complex and messy.
Eric Mc said:
HMRC have no legal power to "accept" telephoned details that they have already requested to be processed through Self Assessment. If you try this and ignore the Self Assessment, you could be looking at a penalty of £1,300 by this time next year.
Are you claiming all the costs and allowances that a business is entitled to claim?
Are you claiming Capital Allowances for equipment and assets used in the business?
The option to have tax collected through a PAYE coding is only open to those who have another source of income that is taxed under the PAYE system (such as an employment or a pension).
Most sole traders do not have that option. It is an option with mixed blessings anyway. Most of my clients who have that option prefer to pay whatever taxes they owe directly (and claim refunds directly too) rather than have their PAYE codes messed about with.
Eric,Are you claiming all the costs and allowances that a business is entitled to claim?
Are you claiming Capital Allowances for equipment and assets used in the business?
The option to have tax collected through a PAYE coding is only open to those who have another source of income that is taxed under the PAYE system (such as an employment or a pension).
Most sole traders do not have that option. It is an option with mixed blessings anyway. Most of my clients who have that option prefer to pay whatever taxes they owe directly (and claim refunds directly too) rather than have their PAYE codes messed about with.
Edited by Eric Mc on Tuesday 8th January 14:47
I have been PAYE since 2010 and they have sent me a online submit reminder again this year, do I need to do it or ring them to stop them requesting it?
Sorry for the thread hijack OP.
Do it.
Being PAYE does not automatically mean you shouldn't be completing an SA return.
Are you a higher rate taxpayer?
Do you have income outside of your salary - such as bank interest received, dividend income or rental income?
Do you pay into a personal pension?
Do you make charitable donations under Gift Aid or Deeds of Covenant?
Being PAYE does not automatically mean you shouldn't be completing an SA return.
Are you a higher rate taxpayer?
Do you have income outside of your salary - such as bank interest received, dividend income or rental income?
Do you pay into a personal pension?
Do you make charitable donations under Gift Aid or Deeds of Covenant?
Eric Mc said:
If after 31 December, it will appear in the FOLLOWING year's tax code
i.e. an under/over-payment for tax year 11/12 will amend your 13/14 Coding rather than the curent 12/13 Coding.
It can all get a bit complex and messy.
Erici.e. an under/over-payment for tax year 11/12 will amend your 13/14 Coding rather than the curent 12/13 Coding.
It can all get a bit complex and messy.
That is completely WRONG.
The 2011/12 returm must have been filed by 31/12/12 to have an underpayment coded out (if less than £3k) to the 2013/14 tax year - if submitted later then the liability will need to be paid in full by 31/1/13 to avoid interest accruing and certainly by 28/2/13 to avoid a 5% surcharge being levied.
David
Thanks.
I never opt for tax coding adjustments for self assessment anyway so none of this ever affects my clients. Which is probably one of the reasons why I may be a bit wolly in this area - as I never exercise this option. Paying the amount up front is the simplest option, in my opinion.
having said that, I genuinely have seen some instances where the adjustment to a person's PAYE coding relates to a tax liability or refund that was from a previous tax year prior to the last tax year. Maybe HMRC don't always follow their own rules.
For those interested, Money Box Live are carrying out one of their Self Assessment phone-ins at 3.00 pm today on radio 4.
I never opt for tax coding adjustments for self assessment anyway so none of this ever affects my clients. Which is probably one of the reasons why I may be a bit wolly in this area - as I never exercise this option. Paying the amount up front is the simplest option, in my opinion.
having said that, I genuinely have seen some instances where the adjustment to a person's PAYE coding relates to a tax liability or refund that was from a previous tax year prior to the last tax year. Maybe HMRC don't always follow their own rules.
For those interested, Money Box Live are carrying out one of their Self Assessment phone-ins at 3.00 pm today on radio 4.
Edited by Eric Mc on Wednesday 9th January 08:51
They might write you a letter seeking an explanation. Strictly speaking, under Self Assessment regulations, they need to open an enquiry into any return that appears wrong. And the letter you receive can appear very legalistic and rather daunting.
In reality, if you get a letter just telephone them using the contact number given on the letter and they are pretty good at sorting everything over the phone.
In reality, if you get a letter just telephone them using the contact number given on the letter and they are pretty good at sorting everything over the phone.
Eric Mc said:
Do it.
Being PAYE does not automatically mean you shouldn't be completing an SA return.
Are you a higher rate taxpayer?
Do you have income outside of your salary - such as bank interest received, dividend income or rental income?
Do you pay into a personal pension?
Do you make charitable donations under Gift Aid or Deeds of Covenant?
Eric, no to everything so do I still fill one out or get it cancelled? Being PAYE does not automatically mean you shouldn't be completing an SA return.
Are you a higher rate taxpayer?
Do you have income outside of your salary - such as bank interest received, dividend income or rental income?
Do you pay into a personal pension?
Do you make charitable donations under Gift Aid or Deeds of Covenant?
Allanv said:
Eric, no to everything so do I still fill one out or get it cancelled?
I was in this situation this year. I rang up. The man from HMRC ran through a couple of questions regarding my income for the year (all PAYE) and said that I probably didn't, and he would pass it to the team that would make a decision. There is a letter somewhere in the post for me, but the HMRC computer now says I don't need to do Self Assessment any more.Allanv said:
Eric, no to everything so do I still fill one out or get it cancelled?
Do it. Get the thing submitted.Hopefully, they will see that you shouldn't be completing the things and not issue them for future years.
If they have asked you to subit one for 2011/12 you still MUST complete it and submit it.
Eric Mc said:
Do it. Get the thing submitted.
Hopefully, they will see that you shouldn't be completing the things and not issue them for future years.
If they have asked you to subit one for 2011/12 you still MUST complete it and submit it.
EricHopefully, they will see that you shouldn't be completing the things and not issue them for future years.
If they have asked you to subit one for 2011/12 you still MUST complete it and submit it.
Not strictly true - the OP can call them and they now have the power (new this year) to cancel the demand to file the return over the phone which is then followed up in writing.
I have done it for a client that was asked to submit a 2011/12 return but is now a PAYE case having ceased self-employment in 2010/11.
Before you cancel your Self Assessment record, are you going to be hit with the tax on child benefit that is due for 2012/13?
David
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