Newbie's simple self assessment questions

bundly

1) I'm claiming 90% of my broadband and telephone, as I only use them for non-business purposes 10% of the time. Is that OK?

2) I have a lodger under the Rent-a-Room Scheme, which is not taxable. Do I have to show the income from the lodger on my tax return?

3) In the whole year, the only employment I did was one hour's work for a university. I was paid £38.89 and the employer paid tax of £7.60. Should I tell them not to deduct tax like this? Should I show this earning on my tax return, or will they tax it again?

4) I had a tax rebate of £150 from last year (overpayment - the taxman took tax, but it was investment income and had already been taxed at source. I have now told the building society not to pay tax on my savings, as I will show the interest on my tax return). Do I have to show the rebate as income?

5) I bought a secondhand computer for £100 cash out of my own pocket, but the computer is for business. Do I have to do all that nightmarish capital expenditure nonsense, taking off one fifth a year or whatever it is, or shall I just show it as petty cash?

That's all for now, hoping someone will know ... and thanks in advance

fengirl_2

1. If you can justify this, then fine.
2. No
3. Yes, show it on your self assessment. You cannot tell them ot to deduct tax - the law states they have to as it is regarded as employment.
4. No
5. £100 is too smal an amount to capitalise - just show it as an expense.

bundly

Thank you Fengirl! Just to clarify - I show the £38.89 as part of my income, and the taxman will know not to deduct tax again?

fengirl_2

You will also show the tax deducted by the university, so credit will be given for that tax paid.

bundly

Thanks again Miss F. Are you a tax wizard?

mrkbrrws

2.) If your only rental income is exempt under rent-a-room you just tick a box on the UK Property pages to say so.

3.) You will not be taxed again as both the income of £38 and the tax deducted of £8 are entered onto the Return.

4.) You can't tell a building society not to deduct tax because you fill in a Tax Return. You can if you expect your total income to be less than your allowances.

The tax refund is not taxable income.

bundly

Supplementary question:

I run a small book publishing business and keep those accounts quite separate from my personal account.

When the business has not enough money to pay for a book to be printed, I "lend" it the money, then when the books have sold enough, I pay myself back.

For example, I paid myself £3,000 last month.

How do I show this on my tax return? At the moment I am showing this as an outgoing of my business account. I deduct all these outgoings before I calculate the tax I pay.

But on the other hand, I don't include anything in my personal bank account into my tax return, because none of it is taxable income - except, perhaps, these repayments to myself for lending the company money.

I'm really confused!

bundly

"4.) You can't tell a building society not to deduct tax because you fill in a Tax Return. You can if you expect your total income to be less than your allowances."

I'm confused now. The BS has a form you fill in so they don't deduct tax. I filled that in recently.

mrkbrrws

Any money you transfer between your business and personal accounts does not affect your profits at all. Do not include the transfers in income or expenses.

If you filled in a R85 for the BS (http://www.hmrc.gov.uk/forms/R85.pdf) that was to declare that your total income is less than your personal allowance. If it wasn't that, I'm not sure what it was?

bundly

Oh, I do not include the transfers in income or expenses. Gosh. I had no idea. I included the loan from myself to the business as business income last year. Then I took it back this year. So I won't show the £3,000 I paid myself back.

Yes, that is the thing I signed. Did I do wrong?

At the moment my income is coming out at £18k and my expenses £13k, so, no, I don't earn enough (£5,435) to pay any tax. I also earn £4,000 from renting a room, but that's not taxable.

fengirl_2

You were correct to sign the declaration to say you didnt pay tax. But keep an eye on the situation should your profits increase.