Online Self-Assessment problem

arunadasi

I'm just filling in my self-assessment online and have hit upon a really strange problem.
The online form calculated my net loss (income minus allowable expenses) for 2010-2011 as £-586. That is correct.

Then it goes on to a page that calculates my disallowable expenses -- things like cost of goods bought for private use, non-business motoring and travel costs, telephone etc. This adds up to £9974.

Then there's a page on tax allowances. I didn't fill anything out here, as I did not understand it (maybe you can help me here!) So I basically skipped this page.

The next page shows me
"Total additions to net profit or deductions from net loss", which comes up to £9974, as above.
At the bottom of this page, I am told that my Net business profit for tax purposes is £ 9118.00!!!
This makes no sense t me. How can my private expenses be calculated as net profit? I made a LOSS in the tax year!

Or do just have to continue with the tax return and it will all come right in the end??? It does say that the return is only 1 complete -- but I am hesitant to go on with that "net profit" staing m in the face!

I've been doing my tax return online for 4 years now and have never encountered anything like this before.

I do hope someone can advise, and I thank you in advance.

BoGoF

Without seeing the screens it's difficult to if/where you've gone wrong.

But the basic reason is that the loss of £586 is based on the fact some of the expenses you entered are not wholly business expenses so once you add back the disallowable element you are in profit.

chrismac1

My first suspicion is that you've keyed a load of stuff into the "disallowable" column when you did not intend to. The disallowables column should only be for private use items. So for example if depreciation is 1,000 then 1,000 is disallowable. If total phone cost is 1,000 but it's split 50% personal and 50% business then disallowable phone is 500.

arunadasi

BoGoF wrote: »

Without seeing the screens it's difficult to if/where you've gone wrong.

But the basic reason is that the loss of £586 is based on the fact some of the expenses you entered are not wholly business expenses so once you add back the disallowable element you are in profit.

But all the same: my total income before deducting anything at all is only £2879! Basically I live from my husband's pension, not from my own income. All our living expenses are actually paid by him, not me.

A light goes on... I guess I need to go back and change everything -- but how do I do that? Is it OK to enter zero for all my disallowable expenses?

I just read that thread about a tax investigation and want to avoid anything that will create problems. Should I explain the situation to HMRC

To further complicate matters -- yes, we do have an accountant but as my husband is German and pays taxes there, she is German. I have filled out the online form based on the calculations she gave us, converting Euros back to £££.

mrkbrrws

The disallowable expenses should only be the disallowable part of any figures you enter in the business expenses boxes.

If you have only included allowable business expenses (or the business proportion of expenses) in the expenses boxes then there will be no disallowable expenses.

arunadasi

Aha. That clears things up! Thanks.