Need help - self assessment confusion

sondora88

I've been trying to fill in a Self Assessment online SA100 as well as an SA800 (self-employed partnership).

We managed to fill in the SA100, but once we got to the view your calculation page, I just cannot figure out the numbers!

I'm hoping somebody could please explain this to me, and help if possible, so confused !

The numbers we input were fairly simple.
We (this was our first year) traded from Aug 2009, til the end of the tax year Apr 2010.

Turnover was 30,000 (rounded up numbers to make it simple).
Expenses were 22,000
Profit at 8,000
Profits split 50/50 between two partners

So, for my SA100 I input 4,000 as my share.
(There were no other adjustments etc to add)

On the tax calculation page, it says I am to pay:
Total tax & etc, 1,900
Plus one payment 950

Total: 2,900

Second payment 950.

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Am I missing something ridiculously obvious here? Surely I've made a mistake? :eek:
When checking the calculations, we should be in band 2 @ 20% tax + 2% ( I think?) for NIC? Although we already pay this quarterly.

Thank you in advance for any help you can give, at our wits end here!

morgani

The £4,000 is the taxable profit from the partnership. This then gets added to the other taxable income of each individual partner. Do you have other income such as employment, pension, savings, rental, investments?

sondora88

Hi thanks for your reply.

I still don't understand why it says I need to pay nearly 3,000 when I only earned 4,000 ? And my partner must do the same?
So we would be required to pay out nearly 6,000 when we collectively only earned 8,000? Thats nearly 75% tax?

We don't have any other income..

morgani

There must be some kind of error in your entries.

Based on earnings of £4,000 each with no other income in the tax year you should not have any tax liability.

It is a long time since I've used HMRC's system (I use other software) but I didn't think they allowed partnership returns and you either needed to file on paper, buy some software or appoint an accountant?

sondora88

Ok, well I'm relieved its not just me..!

In my first post I'm talking about the SA100 which I was told each partner must fill out in addition to the Partnerships/businesses own tax return the SA800.

We are filling out the SA800 with some software we purchased, and the SA100 I talked about above on HMRC's own website.

We did fill out the form initially without placing any taxable profit from the business, by putting the amount we were both paid as sum in the wages/earnings box. But we then we thought this box must be reserved for employees of the business and not us. Is this incorrect?

At first we filled it out so that there was no profit and we did not take a share, and instead filled out the wages amount as the 8,000 sum. Would this be the correct way to do it? The calculations after doing it this way said we were to pay £0 as there was no taxable profit.

Mikeyorks

sondora88 wrote: »

--
Am I missing something ridiculously obvious here?

Yes.

If you're generating a tax due figure of £6k .......... then that is being calculated, somehow, on the turnover figure? (£30k @ 20% = £6k)? Nothing else computes!

Regret I can't help any further as partnership Returns aren't my forte.

jimmo

Can we just check the basics?
On the SA 800 you need to declare the partnership income, expenses, taxable profit and each partner's share of the profit.
Completing the SA800 will not produce an amount of tax payable.
On the SA100s each partner will need to complete a supplementary page SA104s
The individual's share of the partnership profit goes into box 7 on the SA104s.
You obviously need to complete all the other parts of the SA100 that are relevant to your individual circumstances but, apart from the SA104s, you should give absolutely no figures relating to the partnership in your personal Return.

sondora88

mikeyorks - yes! thanks, this makes sense, now I just need to figure out where & what I'm filling it in wrong

jimmo - can you just clarify (i know this is a stupid question, but..) when the forms say enter "profit" = this means "wage/salary" in this sense?
SA800; this one seems to be filled in OK according to what you have said.

SA100; as we are doing it online I'm assuming that the SA104's are included in the SA service page we've been filling in.
The SA100 has been asking for our business turnover however? This is why we entered the 30,000 in here.

In any case, I just logged in to check your instructions with what's on the form - but of course now there is maintenance on that part of HMRC's website!

Thank you all for your input & help its really appreciated. I will have to check the HMRC site again in the morning.

jimmo

Sorry, but you're losing me on that.
As a retired Inspector of Taxes whose own tax affairs are straightforward I do not have access to the on-line SA system and when you talk about a service page I simply don't know what you are talking about.
In my language when you are completing an SA100 on-line you probably need to check a box, probably on page 2, to say you are a partner in a partnership. That will then automatically add an SA 104s into your Return and enable you to declare your share of the partnership profit.
If you are filling in boxes on your personal Return (SA100) declaring the business turnover etc of the partnership then you've got it wrong big time.
On a practical basis I read your posts so far as saying that you have an annual income of £4,000.
I don't buy that. You would be far better off on the dole

Pennywise

You should only have one entry on your sa100 - that's £4000 profit share from partnership. There should be nothing at all in self employment or employment - no turnover, no expenses, no profit shares, no wages - for the purposes of the sa100 you aren't employed and you aren't self employed, so you shouldn't be filling in those sections. You've got profit share from partnership - that's all.

no-oneknowsme

jimmo wrote: »

Sorry, but you're losing me on that.
As a retired Inspector of Taxes whose own tax affairs are straightforward I do not have access to the on-line SA system and when you talk about a service page I simply don't know what you are talking about.
In my language when you are completing an SA100 on-line you probably need to check a box, probably on page 2, to say you are a partner in a partnership. That will then automatically add an SA 104s into your Return and enable you to declare your share of the partnership profit.
If you are filling in boxes on your personal Return (SA100) declaring the business turnover etc of the partnership then you've got it wrong big time.
On a practical basis I read your posts so far as saying that you have an annual income of £4,000.
I don't buy that. You would be far better off on the dole

Jimmo . The op says that this is the first year of trading . Sa started in August 2009 (i think it was) , maybe this year has higher expenses due to the business only starting etc...

Or is this your "tax inspector" nose sniffing out something a bit more sinister ?;)

Income of £30k and expenses of £22k do seem to be a bit high though , i do agree.