Confused over some tax issues

murkins

Hi all,

I was employed for 8 months of last year before going Freelance. Then in March of this year I went into full employment again before finally deciding to go freelance once again. Yeah, complicated, I know

Anyway...

In March of this year I got a tax refund from HMRC based on the fact that I was not employed by a company from August until March.

However, during that time I was earning freelance cash and HMRC were aware that I was acting as a sole trader. I earned a pittance in that time but am now confused about my self-assessment online tax return for 2012/2013.

When I am asked about earnings for that tax year do I only have to declare the sole trader earnings or do I also have to declare the employment earnings for the 8 months until August? I've already paid tax on that so that shouldn't matter right?

Any help or advice would be great.

Suarez

You will have to give your earnings in your employment and tax paid in employment (both from P60).

You will also need to give your income from self employment minus any allowable expenses.

[Deleted User]

If you complete the return online, use the ? option to find out further info as to what is required in each box.

There are clear sections for each type of income. I.e. PAYE total and so on... Remember not to worry about what's already been paid, the calculation at the end will tell you what is due to be paid or due to you - taking account of what you have already paid via PAYE.

You cannot calculate tax liability without including everything, including what you have already paid. You could end up paying too much if you failed to include all income.

If you can't work it out get some advice whilst you have time. Don't guess it could cause you serious problems.

nomunnofun

What a mess! The problem has arisen because either the op claimed or HMRC chose to pay a refund for 2012/13 tax year on PAYE income only when the op filed Self Assessment tax returns. This should not have been done as all of the income for that year should have been taken into account - as it would when the return was filed.

Unfortunately suarez is incorrect about the P60 as one only receives such a form if in employment at the end of the tax year.

The self assessment form must now be completed to include:

a) all PAYE earnings and tax deducted from April 2012 to cessation date - this information will be on your form P45.

b) all freelance earnings appropriate to the tax year 2012/13.

I believe that, somewhere near the end of the return there is a section headed

'tax refunded or set against'. In here you must enter the amount received by way of refund. This should rectify matters.