tax return...haven't got a clue!! help pls

[lilsmum]

only went self employed in jan, doing mobile hairdressing, havent been putting the money i made (not much) in the bank but have wrote everything down only been doing 16 hrs a week (if that)...my tax return came the other day and i havent got a clue what the hell it is all about...pls help me sob sob!! i am very confused and i am panicking a bit now eeekk

[FLUM]

calm down

i'm an accountant

step away from the tax return.

THE EASIEST WAY IS TO DO IT ONLINE

if you want to do it yourself

[Tinker]

Contact the revenue adn they'll help you or do it for you if you contact them in time. Think you've got to send stuff to them by end of Sept for them to do it.

[FLUM]

online system guides you through will take you less than an hour.

don't forget you can claim legitimate business expenses too.

[lilsmum]

lol @flum. why do they make it sooo confusing? is it much easier to understand online? in the form i havent the foggiest what its all about

[otto]

You don't have to fill it in until the end of September, so there's no need to panic now. Can you get somebody to help you out with it? The Inland Revenue helpline is usually quite good. Can you afford an accountant? We have one for dp's accounts. We pay about 400 for him to audit the accounts and fill in the tax return. I

[Mo2]

Firstly, is this for the tax year 2003-4 or 2004-5.

If it's the latter, then first of all stop worrying, because you have loads of time to sort this out.

Is it a request to do a self-assessment tax return, or soemthign else?

There is lots of good software on the market which make sit really easy to fill out your return, and actually completes the forms automatically for you (assuming you put in the correct income figures/ expenses etc).
I use one called TaxCalc.

[lilsmum]

crossed posts , thanks i will try and tackle it later on... what can you claim as business expensives? could i claim my contract mobile rental?

[lilsmum]

it says if i send it back before sept they will do it, if not it has to be back for next jan and i have to work it out myself

[Tinker]

Must be for this year then. Send to them by Sept and they'll do it for you. Can be a nightmare if leave it end on Jan - lots having the same idea, site slow.

[lilsmum]

when and how do you pay the tax once its worked out?

also surely i wont pay much will i? only been earning around £50-£60 a week, 16 hrs -ish

i only started self employment in jan so only been doing it for 4 mths

[otto]

You have to fill in the basic info and send it back by end of September for the tax to be calculated. If you send it in later than that you have to calculate the tax yourself. Yes you can claim for mobile contract. We haven't done it online, but I'm sure the website will give you a list of allowable expenses.

[FLUM]

Well I am not a tax accountant so don't take this as gospel (its left over from my training a couple of years ago)

You can claim anything which is used: 'wholly, exclusively and necessarily' for carrying out your trade.

So if you only use that phone for business then yes. If not just the business calls.

But you could claim: mileage, cost of hairsprays etc,

Although no rush it is much easier to do it sooner rather than later as it is fresh in your mind. Also it allows you to prepare for what you will have to pay (due 31 January 06). Save it up and have it ready!!!!!!!!!!!!!

[lilsmum]

thanks guys!! you are stars...i was starting to panic a bit lol, will have a look on the site later

[FLUM]

You get a tax free allowance called a 'personal allowance' every year - its 4 thousand and something.

sounds as if you won't have earned enough to take you into any tax bracket.

[lilsmum]

yeh i thought that, my tax code was (dont know if it still is) 461L so i gather that means i can earn £4610 before i pay tax, i havent really earned that much, well as much as i should have because dd has been in and out of hospital the last couple of months

[Tinker]

\link{http://www.hmrc.gov.uk/sa/selfemp.htm\Here you go]

[Tinker]

Bum. here

[Prettybird]

Lilsmum - were you working before January this year? ie were you employed by someone esle? if so, you need to include those figures on your tax return to - even if it was taxed at the time. In fact, if yuo were wroking before, you may even find that yuo are due tax BACK, as you might already have paid too much tax!

You would have had a P45 when you finished work, which would give you what had earned for that employer during that ax year and (just as important) how much tax you had paid.

The on-line form is not too bad, honest - and it does all the calculations for you. All you have to do it gather together the information:

• your P45,
  
• how mch money you have earned since you became self employed
  
• any interest statements from the bank/building society (if you have any savings) (or even yuor current account - our Abbey national account sends out an interest statement once a year, as they pay interest on their current accounts), ditto for any investments shares you might have (). This will also include a figure for how much tax has already been taekn off (as banks/building societies already assume that you pay 25% and deduct it at source)
  
• any legitmate expenses directty incurred for your business (the help line will be good for advising you). A milage allowance for getting to our customers would be one legitimate expense (I think it is 48p per mile - the help line will tell you). Phone calls for the business - if you have an itemised bill, then you'll be OK. If it's pay as you go, I think it is more difficult.
  
  The form tells you which figure to put into which box - and if you ring them up, they really are very helpful. Just take it slowly and do it step by step.
  
  Says I who usually does it on-line on 31 January - but fortunately, you can pay on-line too!

[Melanie75]

Hi Lils Mum

My advice to you is to obtain an accountant. The cost of this will almost certainly be absorbed by any tax savings you could achieve by obtaining professional advice. This will also give you peace of mind, and save you from unexpected tax bills.

As your business is straightforward, I expect that this would cost you no more than £200 per year.

I practice as a Chartered Accountant - if I can be of help, please contact me - [email protected].

[Melanie75]

Hi Lils Mum

My advice to you is to obtain an accountant. The cost of this will almost certainly be absorbed by any tax savings you could achieve by obtaining professional advice. This will also give you peace of mind, and save you from unexpected tax bills.

As your business is straightforward, I expect that this would cost you no more than £200 per year.

I practice as a Chartered Accountant - if I can be of help, please contact me - [email protected].

[Prettybird]

Just thought - your tax return might be a wee bit more complicated if you have been receiving any benefits or tax credits (I earn too much for tax credits, so it has never been a factor). From memory, the benefits people send you a statement about how much benefit you have received, either wehn you come off benefit or at the end of the tax year (but it is so long since I last had a period of unemplyment, I can't really remember, and things have probably changed anyway).

Having said that, the Inland revenue help line should be albe to advise yuo as to the figures to put in for the 2004-2005 tax year - ie it is what you have already paid/been paid. (unlike the system for calculating what they should be paying in tax credits for the current year, which seem to be all over the place)

[tallulah]

Authorised mileage rates are 40p mile for the first 10,000 business miles then 25p mile thereafter.

Line rental of a mobile is not a business expense, only the calls.

You don't have to put tax credits on the return.

Website pages here

[Surfermum]

Dh is self-employed and we put money aside each month so that when his tax bill comes in we have the money to pay it.

Sounds like we've got a good deal with our accountant, they only charge us £75, but it is a friend's mum so that could be why. I'd agree that it is reassuring to have an accountant do the forms. When dh was first self-employed it was very complicated as he worked for a Jersey based company but had to pay his own tax and NI, and there's no way would could have argued the ins and outs with the tax office. She also knows all the things we can claim for - use of home as office, car expenses, those sorts of things.

Lots of luck with the business!