Ca anyone help...tax return..

raachel29

My bf is attempting to complete his first self assessment tax return.
He has the money he makes as a business paid into a business account, then takes a wage from that each week.
Where on the tax form do we declare this?
He's not sure whether it goes in the wages catorgary, or whether he doesn't mention it there and it goes in the net profit amount.
We have tried calling HMRC but after 45 minutes on hold we got cut off!

KiKi

raachel29 wrote: »

My bf is attempting to complete his first self assessment tax return.
He has the money he makes as a business paid into a business account, then takes a wage from that each week.
Where on the tax form do we declare this?
He's not sure whether it goes in the wages catorgary, or whether he doesn't mention it there and it goes in the net profit amount.
We have tried calling HMRC but after 45 minutes on hold we got cut off!

I'm assuming this is a limited company, but I'm going to ask the question just in case: sole trader or limited company?

If a limited company, it goes in wages, as he pays tax and NI on that; that's completely separate to the company's profit and doesn't form part of it.

If a sole trader, it doesn't go anywhere, it's just part of the income and you will be taxed as a sole trader on the full amount of profit.

KiKi

raachel29

Hi, he's a sole trader. He owns the company and does the majority of the work, and employs his dad part time.

BoGoF

As he is a sole trader he pays tax on his profits not his drawings. The drawings are not shown in his income and expenses.

KiKi

raachel29 wrote: »

Hi, he's a sole trader. He owns the company and does the majority of the work, and employs his dad part time.

Then as above.

Info only goes in 'wages' when it's paid out formally and you pay tax and NI on it, or as an expense to someone else.

If he's just drawing money from the profit he's made, which is what a sole trader does, then it doesn't go down at all - just put in the income and expenditure.

KiKi