Completing the Self Assessment Form

keithing-ger

Hi there,

In the process of completing my first ever and am really struggling, and am completely frustrated as I pride myself on my exemplary admin skills!

I was self employed for a period and bought a couple of small things for the business, namely stationery, Blackberry and a laptop. How are these items affected? Also used 1 room in my home for business use, and I understand I can claim on this - how do I do this?

During my time in self employment i earned £6,200 but that was all taken out as "salary/drawings" for myself and when you take into account laptop, phone use etc, I made a bit of a loss. Will I have to pay any tax at all?

Also did many business miles as self employed - do they go on the P87 form and not this form?

Finally, I had 2 jobs too, so its a bit of a mess so far!

As you can tell I am really struggling and any help would be appreciated, even if 1 kind person could direct me to a website other than HMRC, which is not very helpful at all!

Thanks (and I am aware i sound like a total muppet! :rotfl:)

Ross

sarflee

Are you filling in a paper return or doing it online? Personally I prefer online.

If you complete a tax return, this takes care of all your income for the whole tax year and therefore under no circumstances should you complete any other forms, unless requested.

Have you read the notes that came with the tax return for self employment, if not they can be found at http://www.hmrc.gov.uk/worksheets/sa103s-notes.pdf albeit these are for the 2007-2008 year, but the principles are the same.

There is also information on theit site for use of a room in your home for self employment http://www.hmrc.gov.uk/manuals/bimmanual/BIM47800.htm

Little_Chicken

I second the online form too. I once tried to fill in a hardcopy and it was as absolute nightmare!

tyllwyd

As other people have said, you fill in different parts of the self-assessment form for your employment and self-employment, so that should all work itself out. I would have thought your P60 would have all the info you need for your two employed jobs?

For the self-employment, if you only earned £6K you don't have to list out your expenses separately, you can work out your profit and just enter that figure. If you made a loss, then that should go to reduce the tax you owe, so considering that you've paid PAYE tax on your two jobs, then you might be due a refund - if you complete the form online it will calculate it for you. A bit of stationery and business phone calls should be fine as expenses, but whether you can justify claiming the full amount of a brand new blackberry & laptop might be a bit more dodgy - hopefully someone else on the forum will be able to give you more advice on that.

oompahloompah

During my time in self employment i earned £6,200 but that was all taken out as "salary/drawings" for myself and when you take into account laptop, phone use etc, I made a bit of a loss. Will I have to pay any tax at all?

As you have already been advised, fill in the tax return online, it is DEFINITELY much easier to fathom!

Your P60s from your two jobs should give you all the information you need for the employment sections.

Re your self-employment - salary/drawings are not deducted from your profit.

Expenses such as stationery, telephone calls, postage etc - tally all these up (if you have receipts or something e.g. bank statements to back them up, all the better). Don't forget to include the cost price (to you) of any items you have sold on in your business.

Re the travelling costs; you can either claim 40p per mile, or you can pro-rata your costs e.g. if you use your car for business 40% of the time you can claim 40% of the car costs (petrol, insurance etc). Again tally these up and add the sum to the expenses figure you've just calculated. Now deduct the total amount from the total of your self-employed income - this is your profit for the year.

The laptop wouldn't affect the P&L as this is capital expenditure but you would be entitled to a "writing down allowance" of 25% of the cost - in theory you would claim 25% each year for 4 years but since you are no longer self-employed I'm not sure how that works; I would imagine you would just get the initial 25% relief. Deduct the 25% of the cost of the laptop from the profit above, and the remainder is the amount you should fill in the relevant box in the tax return and the amount you will pay tax and Class 4 national insurance contributions on.

HTH

Poppy9

As mentioned above plus you can claim a proportion of your home utlitiy bills (long time since I did it but there should be guidance out there). Also if you use your home for work purposes you must inform your insurers. It doesn't normally affect your premium if it's just for office stuff but if you keep stock then this won't be covered.

You will also need details of any interest you have on bank account savings, your bank should send you an end of tax year statement with the information on.

Your basic profit is:

Sales less cost of stock and other expenses like postage, stationery etc. Any money you take out of the business for personal use does not reduce your profit.

If you have any stock remaining you will have to deduct the residual value from cost of sales so increasing your profit. Any stock you took for personal use is counted as drawings so again the cost of this stock must come off your expenses.

tyllwyd

oompahloompah wrote: »

... "writing down allowance" of 25% of the cost - ...

I thought this had been replaced by the annual investment allowance?

PlutoinCapricorn

The salary/drawings issue is very important: it is only if you have a registered company and officially pay yourself a salary that this counts as deductible expenses. If you are a sole trader, this does not apply, otherwise none of us would pay any tax!

Your total income from self-employment minus legitimate expenses is your profit, on which you are taxed.

If you report all income in the appropriate sections, the calculations will be made automatically.

oompahloompah

tyllwyd wrote: »

I thought this had been replaced by the annual investment allowance?

Is that not just for investments in Plant and Machinery? Or does it cover all capital expenditure? I was under the impression the WDA was staying the same for all other capital expenditure apart from Plant and Machinery, but I might have got this wrong - please let me know!

tyllwyd

To be honest, I don't know ! but here http://www.diyaccounting.co.uk/articles/tax_business/annual_investment_allowance.htm

it says "The annual investment allowance applies to all assets categorised as plant and machinery which includes most fixed assets including plant, equipment, fixtures and fittings, computer equipment and commercial vehicles."

I assumed this would cover the laptop, at least? But I'm not sure how it might apply to a business that lasted less than a year.

oompahloompah

You're right! http://www.hmrc.gov.uk/manuals/camanual/CA21010.htm

Thanks for that.

Re the calculations with the business lasting less than a year, HMRC have a ready reckoner so you can work out the percentage to be written off http://www.hmrc.gov.uk/capital_allowances/read-reck-intro.htm