Nil Tax code for self employed

Mismanagement

Hi All
am a bit confused about the nil tax code thing
I was given a nil tax code and I am paying what of would have been my tax to moonbeevor. i have just also been sent a Sof A declaration ( 6 months later!)
which i presume is for them to also calculate a IPA.

My confusion is re my OH who has also just been decalred BR by HMRC
he is self employed and the tax owed is the main reason he is now BR. presumably the tax for 10/11 ( not yet declared) will also be incuded in the BR , but what happens about next years. if they estimate an amount and make him pay that in advance. do we include this in his S o A for when they are working out surplus. We would have estimated an amount for tax in this normally, as of course we must try to put that aside so we dont get in a mess again

Ineedaname

The SOA is concerned about net income only, so no business expenses, tax or NI should be shown on it. So whether your OH has to put the money aside for HMRC or Moonbeever makes no difference.

Mismanagement

isnt net income the income after costs etc have been deducted?

Ineedaname

First you deduct all business expenses to reach a net profit, then tax and NI to reach a net income. So, yes, after all deductions and as above you don't show any business related expenses, tax or NI on an SOA, just net income and personal/household expenditure.

The OR may ask to see business accounts separately to check net income, but that's up to them to ask for.

As for the tax year in which he is BR, he will still need to calculate the correct amount to set aside, because Moonbeever will most certainly want that money. Quite how it's all worked out as to how much he pays, when and whether to Moonbeever or HMRC in each instance, I'm not sure.

Hopefully another self employed person who has been BR can pop in and advise how it's all sorted.

debtinfo

You don't get a nil tax code if you are self employed and so have no dealings with moonbeever, you will need to put aside the taxmoney and pay it to HMRC as usual. He needs to keep complete records as the OR may ask to inspect them, on his soa heshould put down his income after all business expenses and taxes have been deducted

Ineedaname

That clears it up lovely and makes far more sense, will remember for the future, thanks DI.:)