Tax self-assessment calculation is more tax than I've earned - help!

beastieuk

My tax self assessment is calculating that I owe almost more in tax than I've earned! Please help.

For April-Jan, I worked full-time and paid tax etc accordingly. I was freelance Feb-April. I earned £4914 in this period before tax.

Online, HMRC is adding £2028.00 as "Total additions to net profit or deductions from net loss" and I cannot work out where this figure comes from. As a result, it calculates my net profit for 2 months of freelancing as £6860.00 - I wish!

The end result is I owe £4,210.80 for tax, on earnings of £4914.

Any help/advice would be extremely grateful!

Oakdene

Its because the Feb & March earnings will fall into the same tax year as your employed earnings. Assuming it was roughly even for the 3 months of self employment, your earnings for last year will be your employed income which you've paid tax on plus £4914/3*2 = £3243.24.

beastieuk

Thank you for quick reply - really appreciated as tax calculation was very unexpected!! It's been a long time since I've done a tax self-assessment, and never with employed/self-employed combined.

So essentially is the self-employed earnings already had tax added, in a sense? Should I change the total profit for the self-employed to £3243.24 on the tax return? I don't full understand where £3243.24 comes from, I must admit.

beastieuk

Also, for clarity, the self-employed period is 2 invoices of equal amounts that were paid to me on 1st March and 1st April. I received my last full-time pay check on Feb 1st.

Oakdene

Well thats easy then, if you received the second payment for your self employment on the 1st of April, the whole figure of £4914 comes in last years tax calculation.

What were your earnings from your employed work for the year?

[Deleted User]

You earned £4914 - that goes on the return as your self-employed earnings! From that you must deduct any expenses that you incurred.

The £2028 - did you put this in the depreciation box, for example (a disallowable expense).?

Do not submit anything which does not make sense!

And, because people omit this, have you entered the tax paid at your employment?

beastieuk

Thank you,

I earned £35,714.

I also paid £1,193 in student loans.

That just leaves £4914 to pay tax on.

beastieuk

Hello - I didn't put anything in the disallowable section. I double-checked in case that was where the extra 2k had appeared from. That's why I'm a bit stumped as to this extra "profit"!

Oakdene

When you put in your employed earnings, are you also putting in the tax you have paid too?

[Deleted User]

beastieuk wrote: »

Thank you,

I earned £35,714.

I also paid £1,193 in student loans.

That just leaves £4914 to pay tax on.

I have little knowledge on student loans. However, if you left employment in January you should have two months tax allowances left to set against your £4914 - the tax should be just over £600. I would suggest that you provide full details of all of your entries on the self-employed section. And... did you enter the tax paid at employment on the employment section?

beastieuk

I've added the tax paid from employment into self-assessment. I've also played around with the figures (e.g. earned less in self-employment, paid more tax etc) and the £2028 in "tax adjustment" remains.

I don't know if HMRC helps with this, but may have to give them a call. I can't really afford an accountant when it should be a pretty small tax amount to pay in total.