Clothing/professional fees and tax return

[Deleted User]

Wife is a nurse and in previous years has claimed an allowance for clothing and professional fees. The first year we informed HMRC they gave a tax rebate for previous years and i think amended her tax code for future years.

This year shes got to do a tax return (got small business as well now). Bit confused - do we need to allow for this on tax return? Surely tax return is just total income and total tax paid etc giving you a total tax owed with tax code being irrelevant.

Mikeyorks

The tax code is irrelevant ....... but the personal allowance (turned into a Code for PAYE purposes) isn't.

If she doesn't claim the allowance - if still relevant - then it won't be taken into account. As SA recalculates all tax due for the PAYE income plus the self employed profit.

John_Pierpoint

The small business is just that you account for it as an entity and your wife gets the profit after expenses.
Assuming her PAYE job has already used up her tax code (which in itself reflects her personal allowance her uniform etc) she then pays 20% tax on the profit (rising to 40% if she becomes liable to higher rate tax).

There could be another tax called National Insurance waiting in the wings if your wife's very small self employment grows. In theory she needs to register her self employment and then seek relief from NI because of small profits.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/NationalInsurance/IntroductiontoNationalInsurance/DG_190048

jimmo

When completing her return, your wife will have to complete the self-employment pages, SA103 and the employment pages, SA102. Her professional fees and uniform expenses claims will go in boxes 19 and 20 on the SA102.

[Deleted User]

jimmo wrote: »

When completing her return, your wife will have to complete the self-employment pages, SA103 and the employment pages, SA102. Her professional fees and uniform expenses claims will go in boxes 19 and 20 on the SA102.

Ah. Maybe thats what is missing?

[Deleted User]

OK. More confused now.
Bit more info - its set up as a partnership and for that year we made approx £1000 loss which we're going to set against income (£500 each).

Assuming our employers have taxed us correctly through PAYE then at the end of the year your tax outstanding should be £0 if you forget about the partnership income. After all, this is what happens to the rest of the people in the uk who dont do tax returns - its all done through PAYE.

So, if we've got a £500 loss each, that should mean a tax rebate of 22% x £500 = £110 each?

At the moment its working out at £89 for me and £45 for wife. Confused. Surely this means both of us havent paid enough tax in our employment which is impossible surely? Or we're missing something off tax return?

jennifernil

The basic tax rate is 20% these days.

Also, not sure if you can set the loss against your income from your jobs?

And PAYE is not always 100% accurate.

[Deleted User]

jennifernil wrote: »

The basic tax rate is 20% these days.

Also, not sure if you can set the loss against your income from your jobs?

And PAYE is not always 100% accurate.

Of course, its 20%.

Yes, you can set any loss as sole trader/partnership against your income.

jennifernil

You can check the calculations yourself. Check the employed ones first, see if what PAYE has deducted is correct.

Take all the employment income, deduct any allowable expenses, deduct personal allowance, then calculate the tax. Is it the same as deducted via PAYE?