Tax return help!

katvet

I've never had to complete a tax return before and am so confused! I've not had a letter from HMRC asking me to complete one but I think I need to, just not sure when. I registered for self assessment last January as I had decided to do some locum work alongside my permanent PAYE job (first date I did locum work was Nov 2015, last date May 2016). When I spoke to HMRC in Jan 16 they said I did not need to complete a tax return until the following tax year so I assume this will be after April 2017? I've just looked at the online tax return and am completely bamboozled. I don't now what category my locum earnings would fall in (I didn't register as self employed, on the advice of HMRC). I don't know what category my mileage expenses paid by my permanent employer fall in. I don't know whether I need to record that part of the salary they have taxed me on from my permanent employer was a car allowance. I want to claim tax relief on professional subscriptions and don't know where to record these. HMRC speak to me like I'm a moron (which as a vet I'd like to think that I'm not!). Can anyone shed any light or direct me to a helpful resource? My husband has said I can just write to HMRC listing all my income and expenses and they will calculate it for me?

Voyager2002

HMRC will indeed calculate it for you, but only if you complete a paper return (and the deadline for this is October).

I suggest that you seek help from the accounts team at your employer, and unless that resolves everything simply pay a local accountant to do it for you.

MoneySavingUser

1) How did you get paid for the locum work - if you had a payslip and they deducted Tax and NICs then you put it down as an employment.

If you just got paid gross by them then it needs to be put down as self employment income probably.

2) In 2015/16 - Nov 15 to 5 April 2016 is taxable as self-employment
In 2016/17 - 6 April 2016 to May 2016 is taxable as self-employment (assuming you permanently ceased at this point)

3) Assuming they are the standard mileage reimbursements at 45p/25p for travel in your own car then they don't need to go on the return

4) If you had a car allowance it should probably have gone on your P60 and be included with the rest of your employment income

5) Professional subscriptions - go under Employment expenses (or could be split and some against that and some against self-employment expenses)

You should probably ask an accountant to do this for you though.

redpete

The car allowance is just treated as part of your total income, not under a separate category for tax purposes, you enter the difference (if any) between the approved mileage rate and expenses your employer paid you in box 17. Professional fees are entered in box 19. The guidance notes for the forms are pretty clear.

I don't think it matters whether you 'registered as self employed' - you just put the relevant income in the self-employment part of the tax return.

TheCyclingProgrammer

I don't think there's any need to explicitly register as self employed anymore, separate to registering for self assessment. You used to have to as you needed to register for self employed class 2 NIC but these are now collected through the self assessment.

katvet

So I tried filling on the online tax return and it has calculated that I have to pay £946 tax on the £740 I earned in the tax year ending April 2016 - can that be correct?! If so I shouldn't have bothered doing any locum work! I think I need to engage an accountant...

katvet

I was paid for my locum work as a gross sum. For the tax year this only came to £740 - but I also had a permanent PAYE job Mon-Fri (locum shifts at the weekends).

CLAPTON

katvet wrote: »

I've never had to complete a tax return before and am so confused! I've not had a letter from HMRC asking me to complete one but I think I need to, just not sure when. I registered for self assessment last January as I had decided to do some locum work alongside my permanent PAYE job (first date I did locum work was Nov 2015, last date May 2016). When I spoke to HMRC in Jan 16 they said I did not need to complete a tax return until the following tax year so I assume this will be after April 2017? I've just looked at the online tax return and am completely bamboozled. I don't now what category my locum earnings would fall in (I didn't register as self employed, on the advice of HMRC). I don't know what category my mileage expenses paid by my permanent employer fall in. I don't know whether I need to record that part of the salary they have taxed me on from my permanent employer was a car allowance. I want to claim tax relief on professional subscriptions and don't know where to record these. HMRC speak to me like I'm a moron (which as a vet I'd like to think that I'm not!). Can anyone shed any light or direct me to a helpful resource? My husband has said I can just write to HMRC listing all my income and expenses and they will calculate it for me?

if you first earned money in Nov 2015 then that would be the tax year 2015-16.
that means you need to submit your self assessment and pay by 31st January 2017 i.e pretty soon.

without knowing the details impossible to say what tax you actually need to pay

Axel

Assuming you have used up all of your tax-free allowance on your PAYE, then you are only due £148 (20%) on the additional £740 you have earned or £296 (40%) if you are in the higher rate tax bracket.

You will have already been taxed on your car allowance. If your mileage/expenses payment is greater than 45p per mile then you will have to pay tax on the difference. If it is less you can claim tax relief on the difference. There is standard form for this, a P87 which you can download, and you can also include your professional fees on this form.

Your PAYE tax code will be then likely be adjusted to include the additional income and expenses for the next tax year.

What your husband is telling you is also correct, declare all of your income and expenditure in a letter and they will tell you what you are due to pay or be refunded.

Axel

Apodemus

Voyager2002 wrote: »

I suggest that you seek help from the accounts team at your employer, and unless that resolves everything simply pay a local accountant to do it for you.

Since the OP possibly works for a small-scale employer, it is unlikely that there is an accounts team to seek help from, but a strong possibility that the practice manager has not included everything correctly on PAYE.

Kat, the tax due on the self-assessment calculation could be due to an error in your use of the return or an under-collection through PAYE. You would probably need to post the full tax calculation and your P60 details on the forum for this to be cleared up, which I would imagine you are unlikely to want to do!

My bet would be that the issue will be around the car allowance and a difference between how the practice has handled this on the P60 and how you included it in self-assessment.

I guess another possibility is that your tax coding was not correct in the first place. If you have never claimed tax relief on professional costs before (RCVS Membership, CPD costs etc), then it is hard to see how you are assessed as owing so much.

Another thought - are you making pension contributions? And if so, are you making sure that you are entering them on the self-assessment form (or using the correct figure from your P60 income). Again, if the practice has only just been brought into the workplace pension regulations, they may not be accounting for this correctly on PAYE.