Paying Self Assessment Tax

Vixmag82

Hi there,

I am self employed and employed. I don't pay tax in my employed job as I don't earn enough so I pay all my tax together (for both jobs) at the end of the tax year when I do my tax return online.

I earned 12,617.00, last tax year, my tax code is 834L, my expenses were £841, and I donated to charity £120. I worked out my profit as £3436 i.e. 12617 - 8340 - 841 (not taking into account the charity donation as not sure how this works).

My self assessment form said my profit was £4,512.00 and I owe 20% of this i.e. £902 tax which I have just paid. I worked out just now however that that I should only have paid £687.20 i.e. 20% of £3436. Is this correct or am I missing something. I don't want to call up HMRC if it is a mistake on my part.

Thanks in advance.

TriathNanEilean

Vixmag82 wrote: »

My self assessment form said my profit was £4,512.00 and I owe 20% of this i.e. £902 tax which I have just paid. I worked out just now however that that I should only have paid £687.20 i.e. 20% of £3436. Is this correct or am I missing something. I don't want to call up HMRC if it is a mistake on my part.

Thanks in advance.

The figure of £4512 comes from taking your earnings and subtracting from them your 2012-2013 personal allowance (which is £8105 for that tax year - not sure where you got the £8340 figure from that you used in your calculation above).

So it looks like your expenses haven't been included in the SA calculation. Assuming you filled in the self employed form, there should have been a section where you entered allowable business expenses. For a small business, which you are, you don't even need to use a breakdown into different categories - you can just choose to fill in 1 single figure for them (box 19 in SES 1). Your charitable giving I'm no expert on either so will ignore that.

Anyway, you need to get your expenses put in and that will reduce your bill by 20% of their amount (£841). I believe it is possible to modify the return on the HMRC website even having submitted it - but you'll need to look into this or get advice from a more knowledgeable poster than me.