Expenses self employment

[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.

 

 

[taxhelper]

I have  to agree with you. It's draft. Yes the filing date is moved back to end Feb but the payment date remains the same.

Yes, if you are good to go then get the wretched form submitted.

As I said before .... they may charge some interest if you pay after Sunday but just make sure you clear it all by end Feb to avoid that 5% surcharge penalty.  

[kittyadmirer123]

Thankyou Briiliant taxhelper  

 

 

[taxhelper]

No problem. 

[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

[taxhelper]

Might be wise to contact them quickly but, be warned, anecdotal evidence is that HMRC are not always very helpful or generous with TTP ("Time To Pay") deals.

The trouble is the 5% "surcharge". That is going to be levied on sums unpaid at the end of this month and - strictly speaking - HMRC say you must have a TTP arrangement in place "within 30 days of tax due date".

TBH I don't know how they will view your offer but, hopefully, they will understand. Covid and everything.

Best of luck with it all. Let us know what happens if you can.

 

   

[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

 

 

 

 

 

 

 

 

[slick132]

Hi Kitty,

 

I see that Taxhelper has been giving you great help with submitting your 2019/20 SA Return.

 

I assume you haven't yet filed the amendment to claim the "indemnity" expense for 2018/19, so my comments are based on that assumption. We can help with that issue in due course............

 

Now that you've filed the 2019/20 Return, have you looked again at your HMRC account. Go to your HMRC account and click on:-

 

"More details about your Self Assessment returns and payments"

 

This should reflect the SA Return you've just submitted, as well as the payment you just made of £18K.

 

Tell us what is said about what you owe, both for 2018/19 and for 2019/20.

[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?

 

[slick132]

Hi Kitty,

 

Yes, I'm aware your accountant seems to have done a runner.

 

It takes HMRC several days to update their system to reflect recent payments. So, even though you can't access the 2018/19 return, you should be able to access the link I put above in "speech marks". This should give you an up to date picture of what you owe and what you've paid.

 

Please access this and tell us a summary of what it says for 2018/19 and 2019/20.

 

Leave the 2018/19 "indemnity" expense for now - one thing at a time - we'll assist with this in due course.

[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. 

 

 

 

 

 

 

 

 

 

 

 

 

 

[slick132]

Hi Kitty,

 

Can you have another look on your HMRC portal.

 

Can you see the "Business Tax Summary" page. If so, scroll down to the "Self assessment"  box. The last line in that box is the one I mentioned above - "More details about your Self Assessment returns and payments"

 

This is where you should find the summary I mentioned in post #34. 

 

Can you see this link to tell us what is said about what you owe now ?

 

I'm seeing this on a laptop. What device are you using - maybe it looks different accessing the site on a phone.

[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.

 

 

 

[slick132]

Hi Kitty,

 

I'm short of time at the mo but will look back in later.

 

Perhaps @taxhelper may stop by with further suggestions in the meantime.

[taxhelper]

If you haven't registered for a Business Tax Account you may not have one.

 

As your 2020/21 self employed earnings have fallen so dramatically then, yes, it may be a good idea to go through the "SA303" process – as it's sometimes called –and request a reduction in your payments on account.

 

However if you’re having trouble achieving that then it may be simplest if you just file your 2020/21 self assessment Tax Return as soon after 6^th April 2021 as you possibly can. For sure, before 31st July 2021 when that second payment on account is due.

 

Once your 2020/21 Tax Return is filed then everything should be put to rights and you can move on with your life.

 

Good luck.

[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

 

 

 

 

[taxhelper]

Thank you for your kind words. Much appreciated.

If you have a different issue to raise - not directly related to the above discussion - the the mods would probably advise that you start a new thread/topic.

All the best.

[slick132]

Thanks Kitty but taxhelper has given the vast majority of advice here.

 

Use this thread if you want more help claiming the "indemnity" payment for 2018/19 when you're ready; or to further discuss your 2019/20 and 2020/21 payments.