Self assessment tax return - what a maze! Can you help please?

KittyBoo_2

In 2007/2008 I worked for 3 different employers plus a bit of market research for which I am self employed.
1st job I earned £10125 and paid £1164. tax and Nat Ins A£76. (Not sure why there is an A at the end of it.)
2nd job I earned £3374 and paid no tax but £272. Nat Ins.
3rd job I earned £409 and paid £5 tax and £12 Nat Ins.
Self employed I earned £162 and paid no tax and no National Insurance.
When I worked it out on the online Self Assessment form it said I owed £843.
£562.48 is tax for 2007/08 and due by end of January.
£281.72 is for tax for coming year 2008/09.
Does this seem right?
Thanks

toby_puppy

Just did a very rough calculation and was within £25 of your figures so seems OK
the 2008/09 amount is just a payment on account towards next years tax bill, estimated at 50% of the 2007/08 bill.

KittyBoo_2

Thanks for getting back to me so quickly.
I am going to ring them about the payment for 2008/09 as I won't have earned anywhere near last years amount as I have been on Incapacity Benefit since July and only worked part time between April and end of July.
I am off work still and will be for about another 3 months.
Do they take that into consideration.
On my tax form it asked if I was exempt from class 4 contributions.
What are these?

toby_puppy

Class 4 contributions are based on your self employed earnings, ie. you can earn up to £5225 (07/08) before these come into effect, so you won't be liable if you only have £162 on your self employment. If you had been charged it would be part of your overall tax bill.

Yes you are right in ringing them and explaining the situation for 2008/09 - you can reduce the payment on account to a more appropriate figure. Remember there will be a second payment on account of the same due 31 July 2009 so they will ask you how much you wish to reduce each instalment by.

Just be aware that they can charge interest if you reduce the payments and then it turns out you did owe the amount they asked for or more - which is unlikely from what you say.

I would also ask them to send you an SA302 (unless you already have one) - it's the tax calculation which shows how they arrived at your tax bill.

I have just checked one of our clients SA302s today and they have shown a £9000 profit instead of a £9000 LOSS, so they do make mistakes sometimes, it's always worthwhile cross casting your figures to theirs.

KittyBoo_2

Thanks for that.
Do I need a certificate to to say I am exempt from these Class 4 contributions?
I have read somewhere on the Forum that you can claim for mileage and heating if you work from home.
How do you calculate what you can claim for?
I do a bit of Market Research where you fill the forms in online.
I know it's only bits and bobs but it all adds up.
When I was doing a cleaning job, I was paid petrol but this appeared on my wage slip after tax was included.
I'm not sure what to do about this.
I really appreciate your help, as it's difficult to work out the bits and pieces for the return.

toby_puppy

You can request a certificate but they wouldn't have charged the class 4 nic on the tax calculation because your profit was well below the limit. Again, if you get the SA302 you can check on that.

You can claim mileage allowance if you are self employed - http://www.macintyrehudson.co.uk/content/padvisor_introtax/mileage_rates.html
this site gives you the rates.

You can also claim "use of room" in house. Its quite a "grey" area trying to establish a business element though so a popular practice is to bring in a small estimate such as £2 per week as a notional figure.

As you mentioned before, if you just had the £162 from self employment, you wouldnt really need to claim much in the way of expenses anyway.

KittyBoo_2

I've submitted the form after a bit off fraffing around.
I ticked the box that asked if I wanted to reduce the amount for 2008/09 and I put £0 as the amount I wanted to pay (due 31st July) but it says that my "first payment on account for 2007/08 due by 31st January is £0 and that the "Total due by 31 January is £507.04"
It goes on to say that (NOTE: 2nd payment of £253.52 due by 31 July 2009)
Have I done something wrong here because that doesn't make sense?
Thanks

toby_puppy

Hi kittyboo

Sounds like you've done everything OK, in fact there is a technical glitch on the revenue website which I reported a while back - the same error as you describe. Fortunately we now have our own software to submit returns but it sounds like the glitch is still there on the website.

I reduced payments on account for a client once and the same scenario as you descibed happened. However, I rang them and was told it was a known glitch and that BOTH payments were indeed nil. So I wouldnt worry, just give them a ring and explain that you reduced the payments to nil and ask them to confirm that the July payment has been takencare of.

The £507.04 will be the liability due for 2007/08.

Hope this helps.

KittyBoo_2

Sounds reassuring jostenning.
I thought I had pressed the wrong button.
Is the £507 still due by the end of January then?
I am going to ring them and ask if I can have some time to pay this as I am only getting £63.75 a week Incapacity Benefit and still off work waiting for an operation.
Are they usually sympathetic to this do you know?
You have been most helpful and I thank you for the time you have spent answering my questions.

toby_puppy

Hi, no problem kittyboo - glad to be of help.

Yes the £507 will be on actual figures submitted for 2007/08 due 31 Jan 09.

They are very sympathetic towards people in difficulty paying, esp. bearing in mind the current financial climate. A lot of people are in the same boat.

You can ask to pay in instalments (they normally charge a small amount of interest for this, they should give you an idea, but it shouldnt be too much on £507) and you can normally reach a reasonable arrangement. They only seem to get nasty when people bury their heads in the sand and just ignore the demands - far better to explain the situation you are currently in.

Here is an alternative phone number dedicated to payment "difficulties" 01274 539628. Just remember to have your tax reference etc to hand when you call.

Hope all works out OK.

Jo

KittyBoo_2

Thanks again Jo
You are a gem!