Help Needed to complete HMRC online Self Assessment Tax Return

Braders0121

I am currently in the process of completing my Partners self assessment tax return for the tax year 2010/11.

He was employed but was made redundant in June 2010 so decided to go self employed.

I have never completed a tax return before and am slowly following the instructions on the HMRC online website for filing a tax return.
Unfortunately I am stuggling with a few points;

1. He received a redundancy payment which was made up of the following
i - statutory redundancy £3315 on which I am certain no tax was deducted
ii - Compensatory notice pay £1133.30 gross and £226.66 tax

I am not sure which boxes to enter this information in. I have ticked the Employment lump sums and compensation box under other uk income and this gives me several boxes relating to lump sums and compensation in which to enter the figures.

However I am not sure weather I enter this gross or net and if I need to split out the amount of statutory redundancy and compensatory notice pay ?????

2. Turnover for self employed income - should this be gross or net (after the 20% CIS tax has been deducted)

3. Is it correct that he can claim £5 per day for meal allowance if he is out of the house at 6am each morning and back after 5pm? If so where do I enter this category of expense. Under the self employment detailed expenses , the only categories I can see which may be suitable are motor & travel expenses or other office costs?

4. He is claiming mileage allowance instead of motor expenses as his Van is quite old and worth very little and mileage amounts to more (not suprising due to the hikes in fuel prices. Can he also claim mileage for carrying a passenger and if so how would I prove this and can he claim for parking as well as mileage or does parking fall in with claiming motor expenses.

5. He pays Class 2 NIC each week - should the total amount of Class 2 he has paid be entered on the return. If so where?

Any help would be gratfully appreciated - I am slowly pulling my hair out!!!!!:mad:

Thanks

chrismac1

Employment income is normally just the P60 Taxable gross and tax paid. If anything he was paid was paid gross, his employer should have ensured this was damages and hence not taxable. if it was a contractual right then the employer should have taxed it, in essence any error lies with the employer.

Self-employed CIS turnover is gross with the CIS tax added back in. there is a separate box to record the CIS tax paid, this is important as you should get a refund!

Motor and travel IF he is entitled to the £5 a day - this is generally for employed people on overnight stays - "£5 per night".

Yes there is an extra amount for a passenger, yes parking is not in the 40 pence / 45 pence now.

Class 2 NI is a personal amount so goes nowhere on the tax return.

There are probably a few things he can claim you've not considered - £3 per week (or more) for use of own home, up to £140 per year protective clothing, use of own telephone, stationery and any other costs incurred in the course of his self-employment, training costs, certain kinds of insurance such as critical illness (but if claimed for then any payouts are counted as income) and possibly more depending on his trade.

Braders0121

Thanks for your reply, that has really helped!

I thought he would of been entitled to subsistence of £5 per day even though he is self employed. I hear lots of people who are self employed saying they can claim for bread etc etc. Is this not the case then???

Thank

jimmo

1) As your partner was made redundant in June 2010, he will not have a P60 for 2010/11.
He will have to rely on his P45. It then depends on whether the redundancy was included in the P45 figures.
Its a bit of a guess, but it seems likely that your partner's P45 only gives details of his normal earnings and tax to the date of termination. The redundancy money seems to have been paid separately as a "payment after leaving".
In this case it appears that the "redundancy money" that the employer has taxed is money which was contractually due and therefore count as normal earnings.
Therefore on the SA 102 you should enter in box 1 (Pay from this employment) the sum of the pay shown on the P45 and the "Compensatory Notice Pay".
You should enter in box 2, the sum of the tax on the P45 and the tax deducted from the "Compensatory Notice Pay".
On the SA 101 you should enter in box 5 the £3315 but leave box 6 blank.
2) As advised by chrismac 1.
3) No it isn't.
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47705.htm
4) I cannot find any provision that allows a self employed person to claim anything for carrying a passenger. The mileage allowance scheme for the self employed is relatively straightforward. Claim 40 (25) pence per mile for 2010/11 or make a fully detailed claim. End of.
http://www.hmrc.gov.uk/manuals/bimmanual/BIM47701.htm
5) As advised by chrismac 1.

chrismac1

Mileage revisited - it would be 5 pence per mile if you were employed and carrying a fellow employee for business purposes. There is no specific provision in the self-employed section for this 5 pence per mile. However, the purpose of the rates is to reimburse you for expenditure "wholly and exclusively" (W and E) for business purposes. So I would run with the 5 pence providing the passenger meets the same tests as for an employee which is a stricter test of "wholly exclusively and necessarily" (WE and N). My argument would be that anyone who, qualifies for the 5 pence under the WE and N test by definition also meets the lesser W and E test. The argument here is that the 45 pence is based on fuel consumption with one person in the car. There are counter-arguments I'd expect HMRC to run if you got enquired into, and I am sure later in this thread you're going to hear some of them. But the mere fact something is not specifically in the HMRC manual does not mean it's not legitimate - the HMRC manual might be 4 times longer than the equivalent tax manual in Germany but it's still riddled with inconsistencies and gaps, this I would argue is one such gap.

"5p per passenger per business mile for carrying fellow employees in a car or van on journeys which are also work journeys for them."