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[MSE Martin]

If you don't hand your self assessment form in by 31 Jan, you'll be fined £100.

Tax Accountant Tony Tesciuba, (who also happens to be my Uncle) has offered to answer your basic tax queries in the Chat Forum over the next few days.

Why's he doing this?

First because I asked him to, and he's a site user, and second because I promised if he does I'd put a link to his site www.tesciuba.com in here!

Where else to get help?

If you're looking just for form filling help for the self-assessment form, then just call the Inland Revenue Hotline on 0845 9000444.

IMPORTANT! What to ask about?

The first thing to do, if you have a question, is check it's not been answered before. The answers to previous questions are already compiled in the Taxing Times article. Read that first then if your question's not already been answered ask it here.

Ask any basic tax questions about small biz or personal tax. Obviously if it's hugely complex and specific then it can't be done. Also don't put any bank account/overly personal details in your question as this forum is public and will be read by many people

As general guidance questions should be no more than a paragraph long

How long will Tony be doing this for?

All questions should be asked by the end of play on Sunday night. At that point this thread will be closed.

When will I get the answer?

What we'll then do is add all the new questions, with answers, to the Q&A article as soon as possible (as long as there aren't too many questions!) after the closing date.

TO ASK A QUESTION SIMPLY CLICK REPLY.

PLEASE ONLY PUT QUESTIONS NOT COMMENTS IN THIS THREAD

[CIS]

I made a business loss in 2004/05 and it was offset against the employed earnings I had during that year, I received a tax refund.

This year I will make a loss again but most likely wont have any employed earnings before the end of this tax year.

Can I offset losses made this year against the remaining tax paid paid last year ?

[Cook_County]

CIS - To advise on the use of your business loss it is necessary to know:

1. The date you started the business,
2. Your accounting period (eg year ended 5 April, 31 December etc),
3. Whether you have any overlap relief,
4. Are you in business to make a profit, or is this a hobby?

On a related point do not overlook that even though the losses may already be relieved for income tax they are carried forward for Class 4 NiC (not to be confused with Class 2 that you are presumably paying.

[kee286]

My daughter works in a small hairdressing salon, the owner pays her cash weekly approx £150 but does not pay her tax and insurance. How does my daughter sort this out, the salon owner has told her she is not self employed but her responsibility to sort out tax etc?

[skint_smiler]

Hi there - first of all can I just say thanks to Tony (and of course Martin) for this facility, it's much appreciated.

I started working from home as an self employed audio transcriber in September 05 - just to supplement my full time (PAYE) income. From Sept-Dec 05 I've earned less than £2000 - therefore will I be liable to pay any tax on that when I complete my 2005 return this month? I should have been putting money by but (silly sod that I am) haven't actually done so. I've been paying the additional NI contributions.

I thought I read somewhere that there's a lower earnings threshold of around £4k, so was hoping I might escape the 05 tax year?

Many thanks,
skint_smiler

[ck1]

Hi,

I have an interest only mortgage on a flat and although I used to live there, I rented it out so that I could live in a nicer area. My mortgage is more than the rent I get from the flat, and the cost of the place I am living in (renting it) is also more than the rent I receive for my flat.

Do I need to declare any of this, as clearly I am making a loss, and not even actually buying my own property as it is interest only....?

CK1

[koru]

If a company earns interest on a savings account that credits the interest once a year, is this taxable on an accruals basis or when it is received?

[beagle]

Hi,

If the total income received (only from PAYE salary and dividends received from own limited company) is below the higher tax bracket, does a personal self assessment form need to be submitted?

Thanks for your help.

[sparkymarky]

I am having problems completing my first VAT Return. I know it is not self assesment income tax related, but I hope you might help as my accountant is recommending different from the Inland Revenue Helpline.

I build websites and I am VAT registered. I make payments to a Southern Ireland company for a service, and they charge me at a 21% VAT amount.

My accountant and several colleagues have said that, as its already been paid, they put it through as a normal vat invoice with a 21% vat rate, not-intraEC, not zero rated.

I do not sell anything to Europe.

However, The VAT Helpline told me that for purchases made from a company registered in Southern Ireland that I couldn't reclaim the VAT charge back on a UK VAT return. Instead I would need to get in touch with the Irish Tax Authorities and get forms from them.

The VAT Helpline said that I could not put it on the VAT Return with 21% allocated as VAT. I would need to put it on there at zero percent VAT, they did not mean as a Zero-Rated Intra EC supply, as I definitely paid the 21% VAT.

My accountants advice before that phonecall was to put it on the VAT Return in at the 21% rate as VAT.

I find it hard to disagree with the vat helpline, however, I know google europe are based in ireland and have been charging tens of thousands of people 21% vat all over europe. I'm sure they all claim it back.

I'm not sure which method is correct, it seems most people I speak to are not aware of the advice given to me by the Inland Revenue Helpline.

Most people say that they would claim it back as per a normal invoice, 21% vat, not intra-ec, not zero rated, but make sure to have the paperwork to back you up if you are ever audited.

Which method is correct?

Thanks for taking time to answer the MSE Questions.

[lynnemcf]

I am self employed as a proof reader. It is my only income. In my first year of self employment (April 2003- April 04) I earned £8000 after expenses. I am just about to fill in my tax return for 2004-05 and I have earned £2000, well below the personal allowance. Next year (2005-2006) I expect to earn £12000. Can I "lump together" 2004-05 and 2005-06 to pay less tax in 2006?

[estansby]

Slightly different situation to ck1 - I bought a flat in 2001 and lived there until late 2004, when my partner & I decided to buy a place together. I kept the flat on and am renting it out. It is on a buy-to-let, interest only mortgage. The rental income literally just covers the mortgage and other costs (building insurance, maintenance work). Do I need to fill out a self-assessment form?

[Swiss]

I have been working in Switzerland since April 5 2004 (leaving date April 4 2004). I have been paying a mortgage in the UK and various debts and therefore have made no extra profits. Am I considered resident in the UK with split-year treatment because I was there from 2003 to 2004? Or am I ordinarily resident claiming split-year treatment? What parts of the form do I need to fill ensure the correct information is provided to the IR? Thank you.

[COXALLC]

I urgently need to submit my 2004/5 Tax Return and don't know where to start.

I have always had to complete the large booklet form, but in recent years have been asked to complete the 4 page quick Return.

Recently i switched from a company car to using my own and claiming mileage, and so for the tax year 2004/5 my circumstances were as follows:

Aoril and May 2004 - Company Car and have a P11D

June 2005 to April 2005 - Used own Car and claimed mileage

I understand that I can claim some of the money spent on mileage back in the form of a tax rebate. Is this true?

More importantly I don't know which form or return I need to complete, and will it allow for P11D entries as well as mileage when using my own car.

I know my return needs to be submitted by 31st January 2006 and need to do something quickly.

Can you advise?

[dwhatmough]

Hi,

My wife and i set up a small business earlier this year as a partnership. We both had full time jobs as well. It went so well that my wife has quit her job and is now doing it full time. Should we carry on as a partnership or should i drop out and leave it to her. I still have my full time job (c. £25k gross). If i were to drop out do i have to notify the IR and how will sorting the tax out work??

Thanks!

DW

[beedaniel]

I started renting out my old house which has an interest only mortgage in Sept 2005. In which tax year should I declare the income. I also spent about £10,000 doing it up before renting, can I deduct this before from future rent.
Thanks

[tlee]

Hi

I have a small limited company which has about £35k left in its bank accounts. I was the sole employee and shareholder (1 share) ; the company was set up in 2001. It has no creditors I have since ceased to trade and deregistered for VAT and am now thinking/starting the process of liquidating the company as I have had a permanent position (employee) for a few months. Can you advise of the best /most tax efficient method to remove the cash form the company as I am now a higher rate taxpayer and would hate to pay 40% tax on this £ if taken as income when I have not taken £ from the company in previous years! I have heard something about ESC16 but am not sure how this works.

I hope I have given you all the relevant info.

Regards

Tony

[spearmint]

If you are employed and also self employed do you have to pay the £2 per week national insurance or do you just pay class 4 of 8% on profits. And if you do have to pay class 2 is it better to pay it as you go along or apply for a deferment and pay at the end of the year. I know the Revenue will tell you to pay but they just want your money!!!
Also, just to check, normally you pay 8% on profit less tax free pay but being as you have a job do you just have to pay 8% on all your profit.

Thank you

[leucite]

I am completing my self assessment return for my let furnished property, which I have done for several years, and am still confused regarding the difference between claiming expenses for replacing damaged or old fixtures and fittings, such as sofas and window frames and the 10% wear and tear allowance. Last year I replaced all the old windows with double glazing, because they were rotten and falling apart - can I claim this? Can I also claim for replacement of old sofas and other furniture such as beds or does this have to come out of the wear and tear allowance?

thanks very much for your help - your answer to my last query was very useful and the matter has now been resolved with the IR.

[deputy_dawg]

I inherited a small house with a sitting tenant, and when she moved out I decided to renovate the property before putting it back on the rental market. I am confused as to what I can claim as "expenses that prevent the property from deteriorating" as opposed to "capital expenditure incurred on improvements, additions and alterations to the property". I got an electrician to rewire the property. We completely redecorated, including new flooring throughout - can I claim for new carpets and floor tiles? We replaced the kitchen and bathroom, and all the windows. I'd be grateful for your advice on this. Thanks. (The property is let unfurnished).

[MayDiamond]

I am self-employed earning up to about £4k pa so I don't want to pay an accountant for what is just a few transactions. When I complete my tax return should include any tax paid as an allowable expense (3.25A)?