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    • beastieuk
    • By beastieuk 9th Oct 17, 4:15 PM
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    beastieuk
    Tax self-assessment calculation is more tax than I've earned - help!
    • #1
    • 9th Oct 17, 4:15 PM
    Tax self-assessment calculation is more tax than I've earned - help! 9th Oct 17 at 4:15 PM
    My tax self assessment is calculating that I owe almost more in tax than I've earned! Please help.

    For April-Jan, I worked full-time and paid tax etc accordingly. I was freelance Feb-April. I earned £4914 in this period before tax.

    Online, HMRC is adding £2028.00 as "Total additions to net profit or deductions from net loss" and I cannot work out where this figure comes from. As a result, it calculates my net profit for 2 months of freelancing as £6860.00 - I wish!

    The end result is I owe £4,210.80 for tax, on earnings of £4914.

    Any help/advice would be extremely grateful!
Page 1
    • Oakdene
    • By Oakdene 9th Oct 17, 4:21 PM
    • 1,260 Posts
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    Oakdene
    • #2
    • 9th Oct 17, 4:21 PM
    • #2
    • 9th Oct 17, 4:21 PM
    Its because the Feb & March earnings will fall into the same tax year as your employed earnings. Assuming it was roughly even for the 3 months of self employment, your earnings for last year will be your employed income which you've paid tax on plus £4914/3*2 = £3243.24.
    Hiraeth
    • beastieuk
    • By beastieuk 9th Oct 17, 4:28 PM
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    beastieuk
    • #3
    • 9th Oct 17, 4:28 PM
    • #3
    • 9th Oct 17, 4:28 PM
    Thank you for quick reply - really appreciated as tax calculation was very unexpected!! It's been a long time since I've done a tax self-assessment, and never with employed/self-employed combined.

    So essentially is the self-employed earnings already had tax added, in a sense? Should I change the total profit for the self-employed to £3243.24 on the tax return? I don't full understand where £3243.24 comes from, I must admit.
    • beastieuk
    • By beastieuk 9th Oct 17, 4:31 PM
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    beastieuk
    • #4
    • 9th Oct 17, 4:31 PM
    • #4
    • 9th Oct 17, 4:31 PM
    Also, for clarity, the self-employed period is 2 invoices of equal amounts that were paid to me on 1st March and 1st April. I received my last full-time pay check on Feb 1st.
    • Oakdene
    • By Oakdene 9th Oct 17, 4:34 PM
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    Oakdene
    • #5
    • 9th Oct 17, 4:34 PM
    • #5
    • 9th Oct 17, 4:34 PM
    Well thats easy then, if you received the second payment for your self employment on the 1st of April, the whole figure of £4914 comes in last years tax calculation.

    What were your earnings from your employed work for the year?
    Hiraeth
    • purdyoaten2
    • By purdyoaten2 9th Oct 17, 4:38 PM
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    purdyoaten2
    • #6
    • 9th Oct 17, 4:38 PM
    • #6
    • 9th Oct 17, 4:38 PM
    You earned £4914 - that goes on the return as your self-employed earnings! From that you must deduct any expenses that you incurred.

    The £2028 - did you put this in the depreciation box, for example (a disallowable expense).?

    Do not submit anything which does not make sense!

    And, because people omit this, have you entered the tax paid at your employment?
    purdyoaten lost his password
    • beastieuk
    • By beastieuk 9th Oct 17, 4:41 PM
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    beastieuk
    • #7
    • 9th Oct 17, 4:41 PM
    • #7
    • 9th Oct 17, 4:41 PM
    Thank you,

    I earned £35,714.

    I also paid £1,193 in student loans.

    That just leaves £4914 to pay tax on.
    • beastieuk
    • By beastieuk 9th Oct 17, 4:44 PM
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    beastieuk
    • #8
    • 9th Oct 17, 4:44 PM
    • #8
    • 9th Oct 17, 4:44 PM
    Hello - I didn't put anything in the disallowable section. I double-checked in case that was where the extra 2k had appeared from. That's why I'm a bit stumped as to this extra "profit"!
    • Oakdene
    • By Oakdene 9th Oct 17, 4:46 PM
    • 1,260 Posts
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    Oakdene
    • #9
    • 9th Oct 17, 4:46 PM
    • #9
    • 9th Oct 17, 4:46 PM
    When you put in your employed earnings, are you also putting in the tax you have paid too?
    Hiraeth
    • purdyoaten2
    • By purdyoaten2 9th Oct 17, 4:46 PM
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    purdyoaten2
    Thank you,

    I earned £35,714.

    I also paid £1,193 in student loans.

    That just leaves £4914 to pay tax on.
    Originally posted by beastieuk
    I have little knowledge on student loans. However, if you left employment in January you should have two months tax allowances left to set against your £4914 - the tax should be just over £600. I would suggest that you provide full details of all of your entries on the self-employed section. And... did you enter the tax paid at employment on the employment section?
    purdyoaten lost his password
    • beastieuk
    • By beastieuk 9th Oct 17, 5:08 PM
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    beastieuk
    I've added the tax paid from employment into self-assessment. I've also played around with the figures (e.g. earned less in self-employment, paid more tax etc) and the £2028 in "tax adjustment" remains.

    I don't know if HMRC helps with this, but may have to give them a call. I can't really afford an accountant when it should be a pretty small tax amount to pay in total.
    • beastieuk
    • By beastieuk 9th Oct 17, 5:11 PM
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    beastieuk
    Pay from employments £40,714.00
    Profit from self-employment £6,860.00 [should be £4914]
    Total income received £47,574.00
    minus Personal Allowance £11,000.00

    Total income on which tax is due £36,574.00

    How we have worked out your income tax

    Amount Percentage Total
    Pay, pensions, profit etc. (UK rate for England, Wales and Northern Ireland)
    Basic rate £32,000.00 x 20% £6,400.00
    Higher rate £4,574.00 x 40% £1,829.60

    Starting rate £0.00 x 0% £0.00
    Nil rate £0.00 x 0% £0.00

    Total income on which tax has been charged £36,574.00

    Income Tax due £8,229.60



    plus Class 2 National Insurance contributions £25.20
    Total Class 2 National Insurance contributions due £25.20
    plus Student Loan repayments (plan 01) £1,513.00
    Income Tax and Class 2 National Insurance contributions due £9,767.80
    minus Tax deducted
    From all employments, UK pensions and state benefits £5,557.00
    Total tax deducted £5,557.00

    Income Tax and Class 2 National Insurance contributions due
    • purdyoaten2
    • By purdyoaten2 9th Oct 17, 5:19 PM
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    purdyoaten2
    My first thought would be that you have included your gross pay BEFORE pension contributions which are about 10% of gross pay?

    Tax deducted £5557 - taxable pay £27785 plus ten months personal allowance 9167 = £36952. You say that your gross taxable pay was £40714. It can't have been.

    We still need to know what you entered on the self-employment section.
    purdyoaten lost his password
    • Pennywise
    • By Pennywise 9th Oct 17, 7:01 PM
    • 9,186 Posts
    • 16,722 Thanks
    Pennywise
    Have you entered the student loan deductions already deducted from your wages?
    • Dazed and confused
    • By Dazed and confused 9th Oct 17, 8:57 PM
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    Dazed and confused
    purdyoaten2

    Probably unlikely but maybe the wrong tax code was being used and there is tax owed which will be sorted through this return?

    beastieuk

    If possible have you tried deleting your self employment page(s) and then adding it again so you can start afresh for that income?

    Or maybe you could explain box by box every single entry you have made on the self employment pages?
    • purdyoaten2
    • By purdyoaten2 10th Oct 17, 8:11 AM
    • 683 Posts
    • 299 Thanks
    purdyoaten2
    purdyoaten2

    Probably unlikely but maybe the wrong tax code was being used and there is tax owed which will be sorted through this return?

    beastieuk

    If possible have you tried deleting your self employment page(s) and then adding it again so you can start afresh for that income?

    Or maybe you could explain box by box every single entry you have made on the self employment pages?
    Originally posted by Dazed and confused
    I wonder what has given rise to the £2028? He refers to box 63 entry (on the attached) which can only come from boxes 57 and 62. This is the crux of that matter.


    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/603458/sa103f-2017.pdf
    purdyoaten lost his password
    • sheramber
    • By sheramber 10th Oct 17, 11:29 AM
    • 3,737 Posts
    • 2,755 Thanks
    sheramber
    It may help if you give us the figures on your P45 - pay, tax deducted and code number.
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