Navy's handholding thread: Never done a tax return before! EEEKK

[navyeyelasH]

Ok I think I have found the definitive list of all the things I can claim against tax and I have all my receipts, so far so good.

However I can't register for HMRC to send me password and have to call them on Monday. I'm going to start doing my tax tonight as I am babysitting.

Can I make this my official tax Q&A thread please?

The first thing I need to know is what does the form look like, does it need to know detailed expenses like:
1st Jan £80 food
2nd Jan £10 food

or can you can you say:

Tax year food bill =s £100's?

Thanks!

It's really easy online - just have to put down total expenditure and income for the year, no breaking down of it whatsoever.

Chill!

Oh that's ok. So I literally add up my receipts and add my invoices and that's it?!

What's the deal with petrol, I've kept a mileage record but is that good enough "proof"?

PS> thank you chabbychic.

here is the self employed paper tax return - the online version is laid out differently, but if you collate your info on the paper version, it's straightforward to transfer it.

Hi Navy I'm not a childminder but I have done my tax return online for three years. I am not very numerate and I find the whole thing boring but I have been amazed by how easy it is to fill it all in, when you get going.

I did the last one on Thursday.

You don't need to break your expenses down in months. It is just a total figure. In fact I think that food would probably go under the category of 'cost of goods bought for re-sale or goods used'.

There are categories for wages, travel expenses, rent, rates, insurance, repairs, phone, stationary etc. It is fairly broad.

Take a look at the paper version of the relevant form and the notes that go with it - this is exactly the same as the information you have to give online.

If you haven't applied for an online registration yet you might not get the confirmation code for a week (it comes in the post) so you can use the time to prepare everything.

Does this mean that if I began childminding since Arpil 6th 2010, I don't need to fill out a tax return until next year?!

If you became self employed during the current tax year your tax return is not due until Jan 31st 2012 at the latest (taxes for year up to April 2011)

Crossposted there.

Note the following text from the notes I linked to:

"If your annual turnover was below £68,000, you may just enter your total allowable business expenses in box 19 rather than giving a more detailed breakdown." so unless you are a really well paid childminder, you don't have to worry about 'cost of goods sold or used' etc.

Thank you everyone, it all seems like it's going to be very easy then.

Every month I put on my spreadsheet the grand total of my invoices and everything I have paid in expenses. So it sounds like I just stick that in the box and don't even need to break it down as no I do not earn over £68k, more is the pity .

So now I just need to figure out what % PAYE tax I will need to pay and NIC

once you get access to the online system, it calculates it all for you. Much easier than pencil and paper .

That's great!

Although I had better check my stuff now because I can honestly say that by January 2012, I will be able to rely on my memory for an individual expense which incured, for example, in May 2010! I guess that's why everyone advises to do all the paperwork on a monthly, if not, weekly basis.

Can't believe it works it out for you, I thought this was going to be a right nightmare but it seems easy!

Does anyone know:

If I was an employee for the first half of the year and then self employed for the second half of the year would that all go on the form?

Also if I ended up making a loss as a childminder would they give me back some of my PAYE that I would have paid as an employee, or doesn't it work like that as the business costs can't be funded by PAYE earnt in past employment!

You will need to fill in a separate form for your employment that looks like this - make sure you can find your P45 (you presumably don't have a P60) or failing that, your final pay slip as you will need the details from that.

Yes, if you have made a loss from childminding (large start-up expenses? - make sure you read the instructions carefully about treating purchases of equipment) you can offset this against earned income which may lead to a repayment of tax you have paid through PAYE. If you do this, make sure next year (ie 2010/11) that you deduct the 2009/10 loss from your profits for calculation of Class 4 NI, otherwise you will miss out on this relief.

My Achovy, I am confused (and have I ever said how super helpful you are, far more helpful than calling the HMRC!).

Say in this tax year 2009-2010, I make a loss of £100 (what instructions? Will have to have a good read). Can I carry that loss over to the 2010-2011 tax year as a sort of expense?

So Say I made a loss of £100, earnt £200 in the next tax year I would only pay tax on the £100?

I don't have a p60, ap45, or a final payslip for my last job. I was a nanny and they refused to give me any, hence the reason me leaving. I'm hoping HMRC will have a record somewhere although my records seem to be scattered over several different offices.

Well if you made a profit of £200 next year you wouldn't have to pay any tax because it is below the £7,475 personal allowance and £7,225 Class 4 NI threshold that apply next year.

But if you made a profit of £8,000 next year then yes, you can use the loss to reduce this. But what is probably best, is if you use the £100 (or whatever) loss to reduce your income for 2009/10 for income tax purposes so you get a refund and use the same loss to reduce your income for 2010/11 for Class 4 NI purposes.

All this assumes your previous employer was actually operating PAYE - did you get any payslips? Yes HMRC should have a record of the amounts, call them and explain the situation although they are quite busy at this time of year (!)

Me again, thanks for all the help so far everyone!

Right just finishing it up but have a few things to clarify, if anyone has any ideas?

1. I'm claiming my mortgage interest as an expense. I worked this out looking at how much I will repay over the 25 year term, taking away how much the initial loan was, dividing it by 25 to get a yearly figure and then dividing it again by 12 to get a monthly interest only figure. Is that calculation right?

1. I calculated that I use 5/8th of my house 5/7th of the week for childminding so used the calculation =(0.625(5/7))WHATEVER THE EXPENSE IS. Is that right?

1. During the tax year I was employed by 3 people and self employed too. For 2 of my employed jobs I have a p60 so know exactly how much I was paid and how much I paid in tax. For the other employed job I never had pay slips and haven't got a p45/p60 (despite requests!). Anyway, I know the Net figure I was paid. Can I just add 20% onto the Net figure to give me my gross figure - this employed job did not have my tax free allowance.

NEL I don't know the answers but sending you ''keep buggering on'' vibes, hoping someone will be along to help you

x x x x x

1. No, that's not right. You should receive an annual statement from the mortgage company which says how much interest has been added to your mortgage and how much you have paid off, you need to add up the monthly interest figures for the relevant months.

1. 5/8 of your house for 5/7 of the week sounds like a lot to me - what are the 5 rooms that you only use on weekends? Assuming that you can justify these figures, the calclation is correct.

1. Ordinarily I would say phone HMRC and ask about this one, but given the amount of time available I would say put in the amount you received x 1.25 as gross pay and 20% of that amount as tax deducted. Explain what you have done and why in the 'white box' for extra information.

1. Bugger. I have only lived here for 11 months is that why I don't have the statement?

1. Hmm maybe I have done this wrong? I use 5 out of 8 rooms Mon-Fri, between 8am and 6pm. Rooma are, kitchen, playroom, Downstairs loo, Sleep room 1, sleep room 2. I have 6 children here every day.

1. I called HMRC already and they said they can't help me!? But thanks MrA I will do that.

BALD(?) Cheers lovely x

Mr A, as ever, I salute you

1. That makes it difficult! Actually your method will always result in an underestimate so it will do. A closer estimate would be the amount outstanding on the mortgage x the APR.

1. Don't you use any of those rooms in the evening?

1. Well that's not very helpful of them :(

I didn't know we could claim interest from our mortgage? I was always told it was just rent if we rented?!

Same here. I was always told those with mortgages had to like it of lump it. Was only complaining to FiL yesterday about how unfair it was.

Yes looneytune and canary, I know that the NCMA tells childminders that, based on some confusing information they have been given by HMRC.

But all self employed people are entitled to claim an appropriate proportion of mortgage interest as detailed in the HMRC guidance here and here.

Mr A thank you once again you're a star! I've nearly finished my spreadsheet now just need to clarify something with the water company. Going back to my questions:

1. I'll go with what I've got them for simplicities sake I think.

1. Well of the 5 rooms I use in the day time I do use 2 of them outside of work hours on the weekdays. Is there a more accurate way to work it out do you think? I originally wanted to do it on an hourly basis, ie. I work 54 hours a week and the heat and electricity is generally on for 66 hours hours a week. But I can't do the formula for that as it bends my brain!

1. Tell me about it, and I was on hold for 40 minutes trying to get through!