Expenses self employment

[kittyadmirer123]

Hello All

 

I am part PAYE and part self employed

 

my accountant has vanished and i think has immigrated but I only found out 2 weks ago.

 

Im stuck and cant find an accountant ebcasue they are all busy

 

So having to turn to you guys for advice

 

My income pre expenses from self employement is £56000

 

 

 

I bought a mac laptop for £1400

 

I paid my daughter who is 17 , £4900

 

I have  to have an indemnity. I forgot to mention to my accountant last year about my indemnity , so we did not enter ~£2700 on last years return of 2018-2019. Can I enter them onto the return from 2019- 2020?

 

Overall the total of my expenses is ~ 18000 ( fuel/travel/subsistence/stationary , daughter wages  ..etc)

 

Questions please

 

1. Can I claim the laptop as expenses. All of it? or part of it?

 

2. Is ~4900 to my 17 yr old daughter reasonable. She helped me on weekends etc as she studying for her A levels etc ?

 

3. Can I enter the indeminty figure that was missed on last years return ?

 

4. are expneses totalling ~18000 reasonable if my self employed figure before expenses is ~56000?

 

Would appreciate if someone with good knowledge can specifically reply to each point

 

Most grateful

 

panicking so much. called like 10 accountancy firms and all say we cant promise to get things done by deadline, so it seems I have to do everything myself this year online. they stared talking about forms 64-8 which I was totally clueless about

 

 

Please please Begging for advice 

 

 

Thanyouxxxx

 

 

 

 

 

 

 

[kittyadmirer123]

Nobby- v

 

You are most kind XXXXXX

 

very precise and to the point so thankyou

 

I transferred 4900 to her by bank transfer so its all on the bank statements.

 

Re the indemnity, its professional indemnity. Im a nurse and pay fees to the nursing council etc. But because Im self employed , I have to have extra indemnity in case I am found negligent etc....

 

Last year it was £2700 but  wasnt included in last years return 2018-2019. I forgot to tell my accountant. I hope that clarifies. Can i enter it on SA and in the free hand space on SA  , just mention it?

 

Honeybee, Thanks. will respect the forum rules . Bless ya xxx

 

 

[kittyadmirer123]

Thannkyou Ethel for your contribution 

 

exactly you are spot on. The urgency is this year because of the looming deadline of 31 January.

 

Yes I meant the NMC by the indemnity. I will need to claim the current year 19/20, but was clarifying if I could claim the one from 18/19 on the current tax return as i forgot to mention it to my accountant last year. this year Im without an accountant so have to get the skates on and file my SA.  It seems its ok to do that from what i read here

[kittyadmirer123]

Nobby- v

 

thankyou xxx

 

 

i will add and drop a note. 

 

i will be as transparent and if they decide to question anything i have proof for all of that.

 

they cant expect t hold me to a standard expected from an accountant so im sure they will understand

[kittyadmirer123]

Thankyou Taxhelper. I like your username

 

so if my accountant summitted my tax for last year 18/19 ( he is no longer my accountant), are you saying that , because I missed out an expense on last years return, I also have till 31/1/2021 to amend last years return and claim that expense?

[kittyadmirer123]

Taxhelper

 

Dont know how to say it, but a Genuine Thankyou

 

Shows what a great person you are that you are prepared to offer such advice for free .

 

Im vey much indebted.

 

Thankyuo again

 

stay safe 

 

xxx

[kittyadmirer123]

Thanking you ALL xxxx

 

 

Bless ya and keep safe xxx

[kittyadmirer123]

Goodmorning

 

I hope everyone is well and thanks to everyone so far for their advice

 

Just about to submit SA online

 

wanted to check a few things please

 

1. for my fuel mainly, lot of the receipts have faded and i use my internet bank statements for evidence of fuel etc. For example if I wen to BP petrol station, and filled up £40, it would show up on my bank statement and thats my evidence. If i do buy a coffee whilst there, I tend to pay separately, thus keeping the fuel payments e separate. i thn aportion 60% of the fuel cost to business, as ~40% i for personal use.

 

 

Therefore, is this method of keeping records acceptable to HMRC?

 

 

 

2. on the online SA form, there is a box for signature. if Im submitting online, do i have to sign that and if yes, how?

 

3. NIC2. It asked if i had profits over ~£6,500 ( cant remember exact figure). Thats a yes. So next was if i wanted to give NIC2. When I choose yes, a red message error comes up preventing me from proceeding. Only when I enter 'NO' onto the NIC2 that it allows me to contribute. Does that mean the system thinks I shouldn't pay NIC2?

 

 

4. Last year, on the SA of 18-19 ( that my acct had done for me and submitted), I ended up making an overpayment of £800 by 31/1/2020. I also made the first payment on account for 19-20 of half that amount , ie 400.

 

in this years return, im asked if theres any underpayment or underpayment from previous years. hen I enter the overpayment, again i get a red error message which stops me proceeding with the form. Only when I enter, 'NO', meaning theres no over or underpayments , that the online portal allows me to proceed with my SA application.

In effect it means for this year I will have to pay what i owe, without taking into consideration that I had overpaid a ttal of £1200 ( 800 + 400), last year. How can I address that please?

[kittyadmirer123]

Thanks dear taxhelper. I really appreciate it.

 

As a nurse i am part self employed and part PAYE ( i think i had mentioned that in my initial post#1).

 

But I totally agree, everything should balance out.

 

I have kind of worked out how much I owe them. I wont be able to pay it all because I am short of funds. The hospital had delayed processing one of my invoices and so the payment may r may not be in my bank account by the end of the month. I dont know that. If it does get into my account then im Ok paying my tax. if not then I wont have enough.

 

How should I play this? Shall I call HMRC and give them advance notice, stating that I may not be able to pay the lot as a lump sum? I have called the hospital and tried y best and they promised to pay me but they have let me down in the past, so I remain in limbo whether they will pay me in time or not

 

 

[kittyadmirer123]

Hello Taxhelper

 

Thanks again . Your so kind and Im very grateful.

 

I am about to submit the form in the next few hours. Before clicking the submit button there is a calculation page that has been generated by the site based on the info I provided ( income from PAYe and income from self employment etc...with all expenses deducted). their calcs are correct.

 

The figures are correct and I do owe them a sum as well as 1st payment on account for 20-21. I just am not sure I can pay the lot by 31/1/2021 because I did not anticipate that the hospital may not be able to pay me on time ( my jan pay). Thats because I did submit my 'timesheet' to the HR on time but they delayed processing it in time for it to be paid by the end of this month. They have said they have asked for an exceptional CHAPS payment to be made but I remain uncertain whether they will pay it into my account by then or not. thats why i wasnt sure if its best to call HMRC and give them the heads up or not.

 

[kittyadmirer123]

Thankyou Thankyou Thankyou x million million times

 

You are wonderful and sorry to tak up your time 

 

Hope you keep safe and that you and all your loved ones stay safe and are healthy

 

 

[kittyadmirer123]

Thanks

 

I am just about to submit now, but a friend just said that HMRC have extended their deadline till 28th feb.

 

Is this a hoax?

 

ive checked online and it appears true.

 

Whats confusing thought is they are extending the deadline for filing till 28th feb but will still want people to pay by 31/1/2021 and if they owe HMRC any money they need to pay and interest will apply.

 

so extend filing date till 28th Feb with no penalties but charge interest from the first of Feb if we owe them. Bit confusing but I guess at least they have given us some breathing space.

 

A b

[kittyadmirer123]

Thankyou Ethel

 

Yes I am ready to submit

 

just checking every figure and rechecking etc...

 

Personally I am not sure why they would extend the deadline yet keep the payment deadlines unchanged. Its irrelevant in my case, but I struggle to see who would that extension be of beneficial to, if the payments have still got to be made by 31/1/2021. Where the wisdom in that, although I am happy as it may be of help to many millions.

 

 

[kittyadmirer123]

Thankyou Briiliant taxhelper  

 

 

[kittyadmirer123]

Thanks to everyone.

 

Submitted everything yesterday

 

i paid  what I owed them for 18-19.

 

I am however unable tp pay the first payment on account for 20-21 which was also required by todays deadline

 

After revised calculations, that amounts to ~6500

 

Now, I am aware there will be a surcharge 

 

I note taxpayers post #21 re the surcharges pf 2.6% on a daily basis.

 

I know for certainty that I cannot pay the outstanding ( which is the first payment on account for 20-21) , even by the end of feb.

 

I need till at least the end of April

 

Is there any point me calling them and coming up with an arrangement. 

 

I know that i dont have a decent excuse. i should have saved up. I accept its my own fault.

 

However, is there anyway that they would allow me to pay like £1000 in feb , £1000 in march and hopefully clear it by the end of May.

 

I wont be able to afford anything else more because i then wont have anything left to pay for the basics of mortgage. council tax/bils etc.

 

So, before calling them tomorrow, any advice, which i am most grateful for, please?

 

Thankyou again for all your advice so far xxx

 

 

[kittyadmirer123]

'If you are in financial distress and owe any other outstanding tax, you can apply for a ‘Time to Pay’ arrangement. This provides a pre-agreed, time-limited deferral period to pay any tax you owe to HMRC. The government has announced that due to the coronavirus pandemic they’ll be offering Time to Pay arrangements for any tax that will be due on the 31st January 2021. 

 

 

 

If you do not meet these requirements, or need longer than 12 months to pay in full, you may still be able to set up a ‘Time to Pay’ arrangement by calling the HMRC Self Assessment payment helpline on 0300 200 3822 or going online to the'

 

 

 

I read this from a site. Would time to pay apply to  me? Can i call them to arrange that . I am aware that HMRC finance dept is separate to their filing as Taxhelper eluded to. Shall i wait for the finance to do their calculations, or just call them tomorrow and arrange this, bearing in mind, that my payment by internet made  yesterday may have not reached them yet

[kittyadmirer123]

Thankyou Taxhelper

 

I did call the HMRC and got some useful info. The lady who answered was so friendly and helpful and she listened with not a single interruptions. She was fantastic.

 

So may I run this by your please

 

She suggested that i talk to the team of finance/debt to discuss a reduced on payment arrangement.

 

I think I better clarify the picture for you

 

I had completely forgotten that last January, thats Jan 2020,  I had made an overpayment of £6000 on my frst account for the 2019-2020. I was so relived when she reminded me of that because on the 201-9-2020 SA submission  that i did 2 days ago,  I had not taken that into consideration. 

 

However, there I wasnt clear about one issue which i did struggle to make across to her

 

so im gonna share some of the maths here. They are not exact but close

 

 

2019-2020

 

Payment from employment= 53000

profit from self employment ( after expenses )= 43000

 

i. total income combined= 96000

 

ii. PA= 12500

 

iii. amount on which tax is due= 83500

 

iv. 20% of 37500= 7500

v. 40% of ( 83500-37500)= 18400

 

vi. NIC 4 on profits from self employment = 9% * ( 43000-8632)= 3093

 

vii.  total tax due = iv + v+ vi =   7500+ 18400+ 3093= 28993

 

viii. tax already deducted  at source from employment= ~ 10993

 

ix. therefore total due  for 2019-2020 =   vii-viii  =    28993-10993= 18000 

 

I PAID £18000 2 days ago

 

 first payment on account for 2020-2021= 18000/2= 9000 which I havent paid and thats the struggle and the reason I have been calling them to see if they can be flexible

 

 

 

However, having now realized that in Jan 2018-2019, i made a payment of £6000 on account for 2019-2020, I wasnt sure who was correct, the pleasant lady on the phone or me

 

 

She acknowledged that I had paid £18000 and had an outstanding payment for account for 2020-2021 of £9000.

 

She explained that because of the first payment on the 2019-2020 account that I had made in Jan 2020 of £6000, instead of the £9000 that I now owe for the 1st payment on account for 2020-2021, I may just be owing  them just £3000 ( 9000-3000).

 

However, i had a different view point and not sure if she understood me

 

My view is

 

I had already paid overpayment of £6000 last year. therefore, the calculation at    ix  above should be = 28993-10993-6000=    £12000

 

therefore the revised 2019-2020 tax should be £12000. 

the revised first payment of account for 2020-2021 = 12000/2= 6000

 

Therefore revised total due by 31 jan 2021 should be 18000. 

 

I have already paid the £18000 2 days ago.

 

 

If we deduct the £6000 that I had paid last year for the 1st payment on account for 2019-2021 from the 1st payment on account for 2020-2021 ( 9000) then I have to pay them 3000 in 3o days before the end of the Feb month in order to incur no charges.

 

 

However, if we factor the £6000 into the tax calculations as above then the payment of £18000 should really have covered the 12000 due for 2019-2020 and the first payment due for 2020-2021.

 

 

I hope my query is clear, should we deduct the £6000 I had paid from the sum owed now, or should we factor the £6000 into the revised calculations, which means my 18000 would have covered everything in 2019-2020and the first payment on account for 2020-2021.

 

I am fully aware that either way, its the same. the maths will balance itself out. however, the only difference, because I havent got the funds at the present to pay the first payment on account comfortably, if the HMRC accept my version of calculations, where the £6000 paid in jan 2020 is incorporated into the calculations, then I would have no further payments to make at present. 

 

If they choose to deduct the £6000 from the £9000 due, then I would have difficulty paying that by the end of the month or even the end of March 2021. 

 

 

I hope the above is clear

 

Anyone great in maths please advise  xxxx

 

 

 

 

 

 

 

 

[kittyadmirer123]

Dear Slick

 

Thankyou for reading through this post

 

My SA return for 2018-2019 was done by my accountant, so I am unable to view it online as such. I think he filed it as a filing agent, so i actually am unable to access it and view the calculations or make amendments. I am no longer with that accountant.

 

With regards to the 20-19-2020, the 18K I paid was paid on Saturday 30/1/2021, and on checking my bank statements online, it was deducted from my bank amount just today (1/2/2021).

 

Having just checked again, its still not showing so i guess the HMRC has not yet updated the SA return I submited 2 days ago with the 18K

 

As I cant access the 2018/19 ( done by accountant acting as filing agent), theres nothing online about that. i do however have the paper copy of the self assessment statement that HMRC sent me in June 2020. On that statement, i had fully paid my balance for 18/19 by the due date of 31/1/2020, and I had also made the first payment on account for 19/20 of £6000. From my readings around the topic and the kind advice i've received here, it appears that it is acceptable to claim back previous years expenses as long as they are no more than 4 yrs old. So I may take that option because I really have no option to go back and amend the 18/19 return as I cant access it online. Does that make sense?

 

[kittyadmirer123]

Hello Slick

 

Thankyou

 

went to the HMRC

 

couldn't exactly find the link you kindly mentioned

 

but was able to view what they think I owed for tax year ending in 2020

 

Tax.  9000

 

surcharges. 0

 

interest. 0

 

penalties. 0

 

Subtotal 9000

 

less payments for this year  6000

 

less other adjustments.  0

 

total. 3000

 

 

 

so that’s what appears currently on the HMRC site

 

these were based on the 2018-19 SA return and the 9000 was what they estimated will be my liability for 19-20

 

 So as you know this is an estimate. However doing the real calculations for 2019 -2020 and  Based on the latest return which I have filed with HMRC my total tax due for 19-20 was approximately 28,000 of which 10,000 had come off my PA YE. Therefore the remainder tax due for 2019-20  was 18,000  which I paid two days ago. This as we mentioned is not yet reflected on the HMRC website. 

 

Based on this figure of 18,000, my calculations show that I will owe them 9000 as a first payment on account for the year 2021. 

 

 I guess my real question and the really burning question is that the total tax actually outstanding for the year 2019 2020 was 28,000.10,000 of this was  deducted at source  via PAYE. I have made up the remainder by paying the 18,002 days ago. However I’m now aware that I had already made 6000 of this  in my first payment of account in last year’s return. So in effect I have in total paid not 28,000 but 34,000 for the 2019 2020 return. Given that I have now overpaid 6000 can I use that to reduce my first payment of account for the year 2020 -2021 and therefore owe them instead of 3000 instead of 9000?

 

 

 

Thank you. If yes then also please refer to my post number 33 where I suggest an alternative way of calculation and whether that is more accurate  expire after

 

Thank you very much and I really appreciate it. 

 

 

 

 

 

 

 

 

 

 

 

 

 

[kittyadmirer123]

Thankyou Slick

 

Hope you had a nice day

 

The only way I can  log into the self assessment is via the gov. verify portal . when i do succwsfuly log in, i am taken to the page titled

 

 ""

 

information as at 01 feb 2021

 

xxxxx ( my name)

UTR XXXXX 

 

At a Glance

 

View account

 

3000 is now due for payment

 

Interst may be charged on late paymetns amounts due now

 

How to pay

 

You have a total of 9000 becoming due for payment . Your next payment is due on 31 Jul 2021.  For details of the amount and the date of payment please select the figure of tax becoming due."""

 

 

I am part self employed and part PAYE. Nowhere on the page or any of the links do i see  " Business tax Summary" . I have also looked at every link on the various pages and dont see  a link tilted " More details about your......"

 

Anyhow, I think the payment of 18K that I made on 30/1/2021 is now updated on the site . What they have done is as follows

 

For 2019-2020, my due balance was 18K + 9K ( first payment on account for 20-21) + 9K ( second payment on account for 20-21)

 

I paid 18K on saturday 30/1/2021, which would have settled the balance for 2019-2020. 

 

In JAN 2020, I had paid 6K on my first payment on account for 19-20

 

What they have done is deduct the 6K from the first payment on account for 2021 ( 9k-6k), so i am due to pay 3K by the end of Feb as remaining balance for the first payment on account for 20-21.

 

The other 9K is due by 31 july .

 

So, i think all i have to ay now is 3K and i can take a breather till July :). Thats a big relief

 

Only thing i can do is now ask for a reduced payment on account because in 2020-2021, I hardly did any self employment. 95% of my 20-21 has been PAYE which has already been deducted at source. Having done  proviosnal calculation of my 20-21 return, I dont think I will owe them much above and beyond what they have deducted at source, so somehow, i have to get the messages now across to them that the payments on account they are asking for to be paid for 2020-2021, may be too much because I know that come the end of the 2020-2021 finacial year, most the tax owed would have been already taken at source and making these two payments on account would in fact lead me be in credit rather than debt and they will have to pay it back.

 

or maybe I should just pay the 3k just to get them off my back and once the 2020-2021 financial year is over, submit my 2020-2021 tax return.

 

 

 

[kittyadmirer123]

Hello Slick and Taxhelper

 

Sorry, i been on night shift and was resting all day today.

 

I cannot express my gratitude to you enough and everyone else for all the great advice on this forum.

 

I agree with taxhelpers' plan in the last post #41 and will go by it. What a great plan, so thankyou.

 

This was my first time i use the site and cannot express how delighted I am and glad that i did.

 

I found all the comments very useful and constructive and they certainly helped me alot.

 

Now I can, as Taxhelper said, move on and be more organised and alert for the coming few years.

 

Just as a last thing, in the future, if i do need general advice regarding tax, is it better to use this same thread or create another one. 

 

I have so much to be educated about re tax/nhs pension etc.. and as much as I would want to talk to a financial adviser, but I still find that I have more time on this site to ask as much as I want, much more than any time any financial advisor would give me.

 

So if you dont mind, would it be ok to seek you advice in the future?

 

 

Many many thanks again

 

Love from Kitty xxx