I'm feeling a bit scared here...Tax question

[offandcold]

Hi there,

I really hope you can help me ! I'm a cm and before anyone says anything I'm off today so no children. Last year, I paid about 1100 pounds of taxes.

This year I was expecting to pay the same as my turnover is almost the same as year and my expenses the same so I have saved accordingly.

However I have filled my tax return and it says that I owe them 3.700 ??

Out this amount, 2.500 pounds is for class 4 and student loan !

Is there something wrong with it ?

Has your tax code changed this year? Or is that half of next years that they want you to pay upfront?

yes they want me to pay half of next year upfront...I'm in tears

Will you be earning the same next year? On the last page you can apply to reduce the payments in advance if you'll be earning less in 2012-13 than you did in 2011-12. It does say that if you underestimate what you'll owe then you'll be charged interest though.

Sorry to hear about your shock, I had a similar moment, when it said I owed 5k, which was v scary, luckily I realised I'd misentered a figure and could do the reducing payments bit, which brought it down by about 2k, phew!

I think I'll be earning the same next year...I just don't understand how a bil can triple like that..I'm not going to be able to pay all in one go. Thank you for your posts, it helps !

Can you please have a look below ? How much do I have to give for this year and how much for next year ?

Total tax, Class 4 NIC and Student loan due for 2011-12 £2,530.71
Plus
First payment on account for 2012-13 £1,300
Payment due by 31 January 2013
This amount does not take into account any 2011-12 payments on account you may have already made

£3,900
Second payment on account for 2012-13 will be due by 31 July 2013 £1,300
If you want to make changes or additions to your return, go to 3. Tailor Your Return.

Did you make a payment on account last year in July for 2011/12? How much of your liability is your student loan?

It does say the amount doesn't take into account payments you have already made for 2011/12 so if you did make one in July your liability should be less. This year is the first year I've had to pay tax so I'm not sure how it works when you've made a payment on account for the previous year.

I have paid 600 pounds in July. So if they deduct that, I should pay 3300 if I understand ?

That would make sense to me but it does seem odd that if your net profit hasn't changed that you're having to pay so much more does it? Are you definitely sure you've got all the right numbers in the right places? On the part that shows your calculation how different are the figures from last year? Am wondering if there's something to do with your student loan maybe?

I never had a student loan that's the thing, I'm not even british

Is there a separate amount for student loan?
I'd check your figures for this year and last year and see if they are roughly the same or not to check whether you've accidentally put anything in the wrong place or missed something out. What roughly was your net profit for 2011/12?
And then I'd call HMRC and see if they could help.
Hope you work it out - was doing my tax return last night and was glad it wasn't too bad.

I would ring them and discuss it. If you've never had a student loan it sounds like things have gone a bit wrong somewhere.

If you paid £600 payment on account in July 2012 then you almost certainly paid the same in January 2012, so check your account summary.

From the figures you give it sounds like there is about £5,000 of expenses missing. Check through the form again and make sure you put them in the right place.

the only page where I put figures is the page where they ask for

Turnover

then personal allowance which I take its the expenses no ?

Thank you for your help !!

Your personal allowance is the amount you're allowed to earn without paying tax - for 2011/12 was £7,475 I think.

How much were your expenses?

I seem to remember being asked to make payments on account once but i think i phoned them up and they agreed i could just not.

The page I'm talking about is this one :

indicates required information

Turnover - takings, fees, sales or money earned by your business:£
Any other business income not already included above:£
Total business income:£ 23314.00
Expenses
How would you like to record your expenses? *

as a single total value

as a detailed breakdown
Total allowable expenses:£ 7.900
Net profit: £ 16124.00
Net loss: £
Del

Yes, 'turnover' is where you put the total amount you earned, then
'Total allowable expenses:' is where you put a total for all your expenses.

My 'view your calculation' bit also mentions student loans even though I don't have any either, I think its just how its phrased.

The personal allowance for this year has increased, so if your earnings and expenses have stayed the same then you'd expect your tax to go down a bit?

There's a good website called listentothetaxman - and if you put your net yearly profit in there it'll tell you what you can expect to pay for tax and NI.

Cross-posted. Are there any expenses you've forgotten about - your figure seems a bit low?

I think you could do with an accountant. I mean this kindly, but it doesn't sound like you understand this at all. The cost of an accountant could be offset by the expenses they prompt you to claim for.

Is that a similar net profit to the one you had in 2010/11? If your net profit is that then the figure you'd been asked to pay looks about right I think.

Your expenses means just that i believe, what you spent on your business. I don't believe you include your allowance in that. Then you take your expenses away from your turnover and there you have our profit.

Yes I really need an accountant and I also appreciate your help, I checked listentothetaxman and it says that I should pay 1.600 pounds yearly.

It may be that its a one-off piece of advice, and then once you understand where all the figures come from, and where they go into the tax return, you'll feel more confident doing it yourself. It'll probably cost you £200-£400 though...

I actually find filling in the paper version easier.

Total allowable expenses is exactly £7,900 which seems strange - this figure should be everything you have spent on allowable expenses PLUS £2,332 which is 10% of your income as wear and tear allowance.

Do not use listentotaxman, that site is for employees not the self employed.

As a really quick and rough way of working out the total tax and NI for the year, take your profit of £16,000, take off £7,500 to get £8,500 and multiply this by 29% to get £2,465.

What was your profit last year?