Tax return - free software / exam marking = self-employment??

lynneinjapan

I normally file my tax return online using the free HMRC system, but the HMRC site says you can't use their software if you had "trust, settlement or estate income", and (I think) last year I had a small inheritance from my late grandmother's estate. Does this mean that I have to use commercial software to do this year's tax return, and if so, can anyone recommend a free package that's on the approved list?

Also, I have started work as an examiner for one of the big exam boards. I'm paid piecework for the marking I do (so far it's only been after a single exam in summer) and the Ts & Cs say, "All Examiners are classed as self-employed." The reason for this seems to be to prevent examiners from claiming that they are employed by the exam board, but does it also mean I have to fill in the self-employment section of the tax return?

Thanks!

jimmo

Without looking it up, I am pretty sure that the trustees of a trust cannot complete a Trust Return on-line without using commercial software.
A beneficiary of a trust can declare his trust income in a normal on-line Return.
However a small inheritance is an inheritance, not trust income.
If anything you receive from your inheritance is taxable the trustees / executors /personal representatives should have already paid tax on the income and provided you with a form R185 detailing the taxable income and the tax paid on it.
If you don't have an R185 don't worry about it. If anything has gone wrong its not your fault.
With regard to your examiner work, yes you have to complete the self employed pages.

lynneinjapan

Thanks both. I'm still not really sure about the examining work because it's not as if I have a business, or an accounting period - just an intensive 3 weeks or so of work followed by a lump sum payment once a year (or twice, if I'm also marking January exams), and payment is made with basic-rate tax already deducted. The Tax Return Guide (SA150) says that freelance income can be included under "Other UK income" (box 16) and I think this may apply to my situation. I'm already paying NI contributions through my regular job so there shouldn't be any need for me to pay (?)Class 4 contributions too.

I've just checked the date of the inheritance and it was actually in the previous tax year, so I should already have declared it somewhere... but I can't find any mention of it on last year's tax return so maybe I forgot (or perhaps thought I didn't need to declare it). Maybe I'd better put it in the one I'm doing now, then! I can't remember ever having seen a form R185; all I have is a letter from the solicitor (who's in Scotland, in case that makes any difference) asking me to confirm receipt of the money (which I did). But, as jimmo says, if any tax due will already have been paid on it then surely it's not taxable income and so doesn't have to be declared?

Might give the Self Assessment helpline a call tomorrow, if I get a chance.

barak

jimmo wrote: »

.....A beneficiary of a trust can declare his trust income in a normal on-line Return.....

Don't think so! I'm still using a commercial package.

http://www.hmrc.gov.uk/sa/software.htm#1

What's covered by the HMRC free online service

You can send the main Self Assessment Tax Return (SA100) online free of charge using the HMRC Self Assessment service. You can also use this service to send the following pages online - these support your main tax return:

• Employment
• Self-employment
• Partnership - to report the income you receive as a partner
• UK property
• Capital gains
• Foreign

Bear in mind that the free HMRC Self Assessment service only covers the tax return and pages listed above.
If you want to send other tax returns online - for example the Trust and Estates Tax Return or the Partnership Return - or other supplementary pages - you'll need to use commercial software.


What's covered by commercial software

You can send the following returns online using software from commercial suppliers (some of this software is free and some you have to pay for):

• SA100 - Tax Return (for individuals - including those who are self-employed)
• SA800 - Partnership Tax Return
• SA900 - Trust and Estate Tax Return

The commercial software products also allow you to send some or all of the following pages online - these support the SA100 tax return:

• Employment
• Self-employment
• Partnership - to report the income you receive as a partner
• UK property
• Additional information
• Foreign income
• Trust income
• Capital gains
• Non-residence
• Minister of religion
• Lloyd's underwriters

antrobus

lynneinjapan wrote: »

I normally file my tax return online using the free HMRC system, but the HMRC site says you can't use their software if you had "trust, settlement or estate income", and (I think) last year I had a small inheritance from my late grandmother's estate....

A "small inheritance" would be capital and not income. There might be an income element included within the monies you received but then you would have received the R185 mentioned by Mr Jimmo - so if you didn't get one, there's nothing to declare on your IT return and so you can forget about it.

lynneinjapan wrote: »

. The Tax Return Guide (SA150) says that freelance income can be included under "Other UK income" (box 16) and I think this may apply to my situation. I'm already paying NI contributions through my regular job so there shouldn't be any need for me to pay (?)Class 4 contributions too.

Yup, that's where it goes, and you're right about NICs as well.

lynneinjapan

Just spoke to HMRC (after a 25-minute wait on an 0845 number - grrrr!) and got confirmation of what antrobus says:

I shouldn't declare the inheritance, only any interest that I may have earned on it.

Since exam marking fees are being paid with basic rate tax deducted at source, they don't view it as self-employment and it should go under "Other UK income".

Just waiting for *&$%! Santander to send me a tax certificate for the year now (already requested three weeks ago but hasn't yet materialised - why they can't let us register to automatically receive one each year, I don't know!) then I can finish it off.