Self Assessment Help needed??

trixxi

Hi,

I am trying to complete my husbands tax returns, which are late. I have no idea what i am doing but his figures are pretty straight forward
(i think?). He was a taxi driver, I have all his fuel receipts and a note of his earnings less fuel, radio fees, car insurance and road tax.

The notes that accompany his returns seem to be gobildegook to me, can any point me where i might find really simple helpful advise?

T

John_Pierpoint

How much a year has he been making in profit - roughly?

What has he been paying in National Insurance contributions?

Was he/is he actually a licensed Taxi driver or a (licensed?) private hire/courier driver.

How did he work? Totally self employed with his own cab at one extreme or just turning up casually and paying all the costs as a deduction from his takings as he worked at the other extreme?

Obviously the latter situation would make his accounts simpler as he would have no capital assets invested in his business.

Do you have the appropriate set of forms infront of you, complete with the instruction sheet on how to fill them in?

Have you applied to fill them in using the on-line system - the advantage of the latter is two fold:

You have longer to get the job done and sort out the silly little queries that come up when you try to include ALL the expenses.

The computer allows you to keep tying until you get it "right" so you can play "what if" games to teach yourself how the system works before you take a deep breath and pay the tax. Do it manually and you have to get it more or less right first time to avoid penalties, though the tax man will correct "silly" mistakes for you.

When did your husband's business start? In the first 12 - 21 months there is a sort of honeymoon before the system catches up and then starts asking for money in advance.

If you post a bit more factual information, there are several people on here who will help you develop your knowledge.

John.

Presumably your husband's turnover did not reach anything like the VAT threshold?

http://www.moneyweek.com/personal-finance/keep-under-the-vat-threshold-13658.aspx

What do you do for a living? Ever though of working as a team?

trixxi

Hi John,

Thanks for taking the time to reply with such detail.
I have two late returns to do. The first one his profits were (after fuel, radio and road tax was £835)

The following year £5400 (again after fuel, road tax and radio fees)

Yes he was a lisensed taxi driver, with his own car, he worked pretty casually though, deducting all costs from his takings.

Yes i have the forms infront of me, got them on hmrc web. These are old returns so presumed i could not do them online.

Thanks,
T.

John_Pierpoint

Oh dear, I don't think the tax man is going to be very sympathetic!
Are we talking about tax years 06/07 & 07/08 ?
We self employed are all beavering about doing 08/09 at the moment.
What was husband doing with the rest of his time - perhaps working for a PAYE job?

These sort of levels of profit should mean just filling in three figures Turnover, Allowable expenses & Net profit. I did mine in similar circumstances on-line and heard no more about it.
You might have thought about just taking the HMRC standard rate per mile for all costs and depreciation of the car instead of mucking about with detailed receipts for fuel and servicing.(See lots of examples on here) because "the business" has not recorded the depreciation of the vehicle and I have a feeling the vehicle was being used for other things anyway.
Was hubby working for a local firm and used their radio & controller or are you talking about something "clever" like "Zingo". What did he do for a meter?
Unlike lorry drivers, you won't be able to charge meals unless away overnight.
How about maps? "Tom Tom" (but difficult to justify on this level of turnover)?
Extra vehicle tests required by local authority? Criminal Records Bureau check?
Course on how to handle the disabled? Parking costs? (Fines for speeding etc are not allowable I believe). Tolls (Bridges M6 Central London)?
I cannot think of much else.
Is your place of business your home - makes getting into the vehicle tax allowable as you step out of the front door.

Should I say "tips", or would your husband tell me to wash my mouth out?

trixxi

John,
Yes its 06/07 and 07/08.
No hubby hasnt been doing anything else.
Dont have a record of any mileage, so was just going to use the three figures u mentioned in an attempt to keep it simple.
Yes car was used for personal stuff too.
It was a local firm, have never heard of zingo???
Dont have any other paperwork to use for the likes of tests etc, again was just going to use the basics since thats what i have evidence of.
Yes home is probably place of business, dont know what you mean about vehicle tax allowable?

We live in scotland what do you mean "tips"?!!!!

Thanks for being so thorough, and helpful.

John_Pierpoint

From my time in Scotland, I remember the people as generous and warm hearted (and drunk?). I think it is something to do with Celtic [STRIKE]jeans[/STRIKE] genes:D
Google "Zingo" - it enables a London cabbie to operate truly as a one man band as well as just cruising the streets looking for a fare.
I remember looking at a chart of fare rates per mile for taxis about 5 years ago, when the government was thinking of deregulating the business (Who needs the knowledge when we can all buy a Tom Tom?!? It is said that a London cabbie has to learn 50K road names and 70K points of interest - or at least half of that to pass the knowledge)
At that time the standard rate varied between 4.80 in central London and 1.40 in some northern town. (Don't quote me, I'm working from memory). In the good times London cabbies could make serious money, but you had to find somewhere to live preferably with somewhere secure to keep the black cab. I know a cabbie busy building a villa in Bulgaria.
In theory you should be apportioning the vehicle expenses over the business and private mileage, but on the other side of the coin you should be writing off the cost of the cab according to the HMRC formula (explained elsewhere on this forum). In bad times like now the governments tend to change the rules towards "free depreciation" (ie what you spend can be written off against profits as you see fit meaning immediately if you are making enough profit to cover it - the idea is to encourage those still making profits to go out and spend them on something useful to the business).
A fellow poster discussed the simple way versus the complex way of claiming vehicle expenses here:
http://forums.moneysavingexpert.com/showthread.html?p=23905049&highlight=inspector#post23905049

What did hubbie do about National Insurance in 07/08?

I hope hubbie's current work is more profitable?!

trixxi

:rotfl:yes we are a jolly bunch!!!!

Thanks for the link will have a look at it. Hubby had a stroke hence the rubbish earnings, spent alot of time recovering.

He has moved away from s/e altogether, which is fab, now earns steady regular money, paying all his tax and ni, just the way it should be.

These are the last of the loose ends from being s/e so I am trying to do all this without him knowing. I applied for tax credits, not knowing we hadn't done these returns and seem to have got in a bit of bother.
Hubby has not dealt with any finances since his stroke (he used to do it all and i was clueless), trying to keep him stress free, hence the reason I know nothing about it.

Thanks so much for you help i really do appreciate you taking time to post such detailed replies.:D

John_Pierpoint

If the tax man's computer slaps a penalty on you for being late, this sort of medical problem is grounds for appeal.

I think I would include a covering letter explaining your problem with the return.

Else where on this forum you could find me struggling through with "Uncle Dog's" probate.
He was carried off into hospital with what we (his nephew's and niece's) thought was a mini stroke but it turned out he was dying of a brain tumour.

It effected his language (& writing) first. When he was in hospital, he was really struggling to say something profound. I was struggling to understand.

Eventually I sussed it:
"Can you help me with my tax return?".

Pathetic that the system has turned us into little worker ants.

John.

PS Unless you have power of attorney, doesn't hubbie have to sign the return?

trixxi

Hi,

It really is a sad state of affairs when people who are really sick are worrying about the tax man.

I will include a letter and keep my fingers crossed.

No i dont have power of attorney but if he knows I have dealt with it all he needs to do is sign the letter and forms.

Unfortunately i cant return the favour of advice as have no experience of probate but hope your getting all the support you deserve.

John_Pierpoint

Thanks Trixxi,
When I've finished the probate stuff. I'll put my tips up on here.
Only a house to sell now in Hampton Court, a final Inheritance Tax "adjustments" return to do plus two self assesment income tax returns (one for 6 months before death and one for 6 months after death).

Then a trust return for 09/10 in due course.

trixxi

Oh sounds so simple!!

One last question for you!!
I have the 09 return to do also, which hubby was only SE until nov08, do I just need to put se figures on this return or do i need to include is employed earnings as well?