HMRC self-assessment calculation, surely this is wrong

[flibbage0]

To break it down I’ve done self-employed work in the past financial year however with a twist.

April 2019-September 2019- Money went straight into my account- no tax, no national insurance

September 2019-April 2020- Worked as a locum BUT I received a payslip and the tax and national insurance was already deducted, got a P60 which states the total income and the tax deducted. Also the HMRC website detects I’ve been employed by them automatically and it matches with the P60

I’ve just calculated my self-assessment and they have combined BOTH incomes together and then taxed that, surely that’s wrong?

Any help would be appreciated, thanks

In short- Income A+B combined and taxed even though income B has already been taxed

[i4got]

flibbage0 said:

To break it down I’ve done self-employed work in the past financial year however with a twist.

April 2019-September 2019- Money went straight into my account- no tax, no national insurance

September 2019-April 2020- Worked as a locum BUT I received a payslip and the tax and national insurance was already deducted, got a P60 which states the total income and the tax deducted. Also the HMRC website detects I’ve been employed by them automatically and it matches with the P60

I’ve just calculated my self-assessment and they have combined BOTH incomes together and then taxed that, surely that’s wrong?

Any help would be appreciated, thanks

In short- Income A+B combined and taxed even though income B has already been taxed

Have you filled in on the SA the tax that you paid on income b?

The SA should calculate tax on all income (A & B) but then make allowance for the tax you already paid on income B - but you do need to enter that tax paid.

[flibbage0]

i4got said:

Have you filled in on the SA the tax that you paid on income b?

The SA should calculate tax on all income (A & B) but then make allowance for the tax you already paid on income B - but you do need to enter that tax paid.

Where about is this option to mark it as tax paid on income b?

[i4got]

flibbage0 said:

i4got said:

Have you filled in on the SA the tax that you paid on income b?

The SA should calculate tax on all income (A & B) but then make allowance for the tax you already paid on income B - but you do need to enter that tax paid.

Where about is this option to mark it as tax paid on income b?

You create two employments on the SA. For employment A you type in the income received and zero as the tax paid. For employment B you enter the income received and the tax paid (from the payslips)

I don't use the paper form - I used an online system (TaxCalc) but I am assuming that the paper form allows you to create two employments as described?

[caiss4]

Looks like you were self-employed and then employed during the tax year. You need to tick both SE income and employed sections at the start of the SA set up. In the employed section you'll have the option to enter tax paid.

[MaxFromage]

caiss4 said:

Looks like you were self-employed and then employed during the tax year. You need to tick both SE income and employed sections at the start of the SA set up. In the employed section you'll have the option to enter tax paid.

This should be correct, although the employed tax should be dragged through already? I only use the online system for one friend and don't pay much attention to using it. All other returns I do are processed via 3rd party software. IIRC you need to go right to the end to see the tax deducted?

You may want to employ an accountant for the return. Locuming has some quirks to it, but there are plenty of costs that you should be claiming.

[anonymous-user]

flibbage0 said:

I’ve just calculated my self-assessment and they have combined BOTH incomes together and then taxed that, surely that’s wrong?

Your HMRC tax calculation will always begin with all incomes at the GROSS level and then show separately any tax that's already been paid or credited. This is the only way that a correct NET position can be ascertained after tax. For instance, you may have been charged 20% through PAYE but actually be liable at 40% on some of it - so they want to collect the additional 20%.

In other words,
A. HMRC start with your gross income (not the cash you've received)
B. HMRC calculate your overall tax liability
C. HMRC deduct any tax already paid or credited
D. HMRC bill you for any tax still due, which is "B" minus "C".