Losses and Claiming Back Tax from PAYE, Help please.

[Deleted User]

Can anyone help me with these figures.

My salary is 25 K before tax. I paid tax at the normal 20% rate, minus tax free allowance.

I have losses of 11K from self employment.

I want to offset the loss.

What could I expect back in paid PAYE tax?

Many Thanks all

Dazed_and_confused

assj wrote: »

Can anyone help me with these figures.

My salary is 25 K before tax. I paid tax at the normal 20% rate, minus tax free allowance.

I have losses of 11K from self employment.

I want to offset the loss.

What could I expect back in paid PAYE tax?

Many Thanks all

What years tax return are you completing and are you setting the losses against other income in that year or carrying them back to an earlier year?

[Deleted User]

Sorry it's years 2012/ 2013 and I was hoping to offset against the same year.

Davide123

11k x 20% =

Dazed_and_confused

assj wrote: »

Sorry it's years 2012/ 2013 and I was hoping to offset against the same year.

If the PAYE job was taxed correctly and there are absolutely no other complications then the refund would be £2199. Don't forget HMRC have a set period to question your return so you could get a tax repayment and then have to pay some or all of it back later!

[Deleted User]

Thank you, do you know how likely this is? I think I have everything in order and I have completed my own return, I'm happy to repay anything if indeed that say I should, however I'd rather get it right first time.

I have applied all of the costs and looked at capital expenditure. So I know I have covered everything, the only concern would be that they do not accept my accounts based on the proof I have provided.

Dazed_and_confused

assj wrote: »

Thank you, do you know how likely this is? I think I have everything in order and I have completed my own return, I'm happy to repay anything if indeed that say I should, however I'd rather get it right first time.

I have applied all of the costs and looked at capital expenditure. So I know I have covered everything, the only concern would be that they do not accept my accounts based on the proof I have provided.

I don't think HMRC accept "accounts" as such. You put the detail from your accounts on your return (along with any other taxable income) and get a tax bill or refund purely based on this. There is then a period when you can change your return if you have made a mistake and HMRC can question your return.

There's been a recent thread about this from someone who was investigated because they missed a PAYE job off their return and owed money back as they hadn't paid any PAYE tax on that job.

Dazed_and_confused

assj wrote: »

Thank you, do you know how likely this is? I think I have everything in order and I have completed my own return, I'm happy to repay anything if indeed that say I should, however I'd rather get it right first time.

I have applied all of the costs and looked at capital expenditure. So I know I have covered everything, the only concern would be that they do not accept my accounts based on the proof I have provided.

If you have completed your own return doesnt the calculation show the amount of tax overpaid?

[Deleted User]

Sorry yes I have prepared my accounts ready to complete the return.

It's a partnership so have to do that one first and then two single returns, however haven't had the notice to complete the tax returns for individuals as yet.

Thanks again.

nomunnofun

Please note that you have a further relief for losses which many do not claim and that is against your Class IV National Insurance liability. In other words you can claim the Income Tax loss as you have stated and receive tax relief at 20%. However you are also entitled to claim relief against future Class IV NIC liability, potentially obtaining relief at a further 9%.

While this area used to be a specialism of mine it has never ceased to amaze me just how few in the accountancy profession are aware of this little gem.

http://www.hmrc.gov.uk/manuals/nimmanual/nim24610.htm

[Deleted User]

Thanks very much, didn't know anything about this! :-)