Sole Trader self assessment
Discussion
Hello
Entering a sole trader self assessment and have a few questions..
1. The total income is 24k but the expenses page says something like "because you've told us you are within the VAT threshold please enter detailed expenses. Dont have exact wording. I think it's an error because the self assessment form / help notes word differently as "If your annual turnover was below £85,000, you may just put your total expenses in box 31". ?
2. Expenses are below £1000 but it looks like we can just claim the trading income allowance rather than list everything, am I reading that correctly?
3. There is a warning saying according to our records your tax code contains a note about underpayment of tax of £0.00. There is no such note, but if I choose NO I have to enter a different amount. If I choose YES (meaning zero is correct as the underpayment amount) it tells me I'm wrong!
Normally do PAYE self assessment so any help appreciated. I think it's odd that the online version doesn't mirror the paper / PDF version exactly.
Thanks
Mike
Entering a sole trader self assessment and have a few questions..
1. The total income is 24k but the expenses page says something like "because you've told us you are within the VAT threshold please enter detailed expenses. Dont have exact wording. I think it's an error because the self assessment form / help notes word differently as "If your annual turnover was below £85,000, you may just put your total expenses in box 31". ?
2. Expenses are below £1000 but it looks like we can just claim the trading income allowance rather than list everything, am I reading that correctly?
3. There is a warning saying according to our records your tax code contains a note about underpayment of tax of £0.00. There is no such note, but if I choose NO I have to enter a different amount. If I choose YES (meaning zero is correct as the underpayment amount) it tells me I'm wrong!
Normally do PAYE self assessment so any help appreciated. I think it's odd that the online version doesn't mirror the paper / PDF version exactly.
Thanks
Mike
bmwmike said:
Whys it called self assessment then? 
Because it passed the responsibility for calculating the tax liability from the Inland Revenue (as it was in 1995) to either the tax payer or the tax payer's agent.Before tax year 1995/96, it was the Revenue's responsibility to calculate, assess and collect the tax.
From tax years 1995/96 (for partnerships) and 1996/97 (for individuals), the legal responsibility shifted to the tax payer or their agent, if they were using an agent's services.
UK tax law is fairly complex. Just because it looks like a question is straightforward doesn't actually mean it is.
To put a single figure in a box on a self assessment tax return, HMRC assumes that the person entering that figure knows and understands the tax legislation that lies behind that figure.
To put a single figure in a box on a self assessment tax return, HMRC assumes that the person entering that figure knows and understands the tax legislation that lies behind that figure.
HMRC are concerned that since they introduced Self Assessment 25 years ago, the standard and quality of information that they have received, especially from smaller sole traders, has been very poor. They are strongly suspicious that income has consistently been understated and costs and allowances over claimed.
And I am pretty sure that they are correct.
The introduction of Self Assessment was not just a new form of tax return. It brought wholesale changes to the Inland Revenue (now HMRC) which involved getting rid of thousands of their top level Tax Inspectors and shutting down virtually all of their local tax offices. As a result, they lost the ability to scrutinise and sensibly query data (especially accounts and tax computations) for smaller businesses.
They had planned to abolish Self Assessment on 5 April 2018 but that plan has been postponed for the moment. But I am sure the current Self Assessment system will not be around for very much longer.
And I am pretty sure that they are correct.
The introduction of Self Assessment was not just a new form of tax return. It brought wholesale changes to the Inland Revenue (now HMRC) which involved getting rid of thousands of their top level Tax Inspectors and shutting down virtually all of their local tax offices. As a result, they lost the ability to scrutinise and sensibly query data (especially accounts and tax computations) for smaller businesses.
They had planned to abolish Self Assessment on 5 April 2018 but that plan has been postponed for the moment. But I am sure the current Self Assessment system will not be around for very much longer.
bmwmike said:
Hello
Entering a sole trader self assessment and have a few questions..
1. The total income is 24k but the expenses page says something like "because you've told us you are within the VAT threshold please enter detailed expenses. Dont have exact wording. I think it's an error because the self assessment form / help notes word differently as "If your annual turnover was below £85,000, you may just put your total expenses in box 31". ?
2. Expenses are below £1000 but it looks like we can just claim the trading income allowance rather than list everything, am I reading that correctly?
3. There is a warning saying according to our records your tax code contains a note about underpayment of tax of £0.00. There is no such note, but if I choose NO I have to enter a different amount. If I choose YES (meaning zero is correct as the underpayment amount) it tells me I'm wrong!
Normally do PAYE self assessment so any help appreciated. I think it's odd that the online version doesn't mirror the paper / PDF version exactly.
Thanks
Mike
1. I think you've completed an earlier box incorrectly. IIRC one of the first things it asks you is if your total turnover is over £85k. You may have clicked "YES"Entering a sole trader self assessment and have a few questions..
1. The total income is 24k but the expenses page says something like "because you've told us you are within the VAT threshold please enter detailed expenses. Dont have exact wording. I think it's an error because the self assessment form / help notes word differently as "If your annual turnover was below £85,000, you may just put your total expenses in box 31". ?
2. Expenses are below £1000 but it looks like we can just claim the trading income allowance rather than list everything, am I reading that correctly?
3. There is a warning saying according to our records your tax code contains a note about underpayment of tax of £0.00. There is no such note, but if I choose NO I have to enter a different amount. If I choose YES (meaning zero is correct as the underpayment amount) it tells me I'm wrong!
Normally do PAYE self assessment so any help appreciated. I think it's odd that the online version doesn't mirror the paper / PDF version exactly.
Thanks
Mike
2. Yes.
3. Click NO and leave the box blank. (In fact from memory doesnt it tell you which box to click if the figure is wrong?)
Countdown said:
1. I think you've completed an earlier box incorrectly. IIRC one of the first things it asks you is if your total turnover is over £85k. You may have clicked "YES"
2. Yes.
3. Click NO and leave the box blank. (In fact from memory doesnt it tell you which box to click if the figure is wrong?)
Thank you sir 2. Yes.
3. Click NO and leave the box blank. (In fact from memory doesnt it tell you which box to click if the figure is wrong?)
For 1 it does seem like the wrong value was entered initially but it's like the form doesn't recognise the value has changed. Either way the correct value is in now, will try restarting.
2 - thanks for confirming.
3 - didn't seem very intuitive and I tried all sorts. Seem to remember when I did my own SA I had the same message and capitulated in the end and said something like "yes, the overpayment is wrong and I owe £0.00". It's a really poorly worded question, double negative iirc.
Thanks again. We will speak to HMRC for 1& 2 to see what they suggest but I appreciate your help.
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