Tax return help

katie4

Comms69 wrote: »

Don't worry it's fine.


You pay no tax on the first £11,500, then 20% (until the next tax bracket, which you're nowhere near)


In reality for the £11,179 you owed zero tax.

Thank you!

katie4

Comms69 wrote: »

Don't worry it's fine.


You pay no tax on the first £11,500, then 20% (until the next tax bracket, which you're nowhere near)


In reality for the £11,179 you owed zero tax.

Sorry if they shouldn’t have taken any tax why haven’t they refunded me the full £345 that they have taken? Thanks

Comms69

katie4 wrote: »

Sorry if they shouldn’t have taken any tax why haven’t they refunded me the full £345 that they have taken? Thanks

Ill take a wild stab in the dark and say that you had fluctuating hours at some point. HMRC don't know the full tax owed until april, but they do adjust periodically when role / wages change.


Either your initial tax code was wrong and they adjusted part way through the year or they estimated at some point.


Seriously I appreciate this may seem confusing (crap education system)


here's one example, just to keep it simple.


Someone earns £1000 a month, the tax therefore at the end of the year is £100 (£12,000 - £11,500= £500 * 20%)


But 6 months in they drop to £950 a month, thereby £300 on income is lost. (total for the year is therefore £11700. £200 over on the threshold and therefore 20% on £200 is £40) The tax office adjusts it, realises that the tax due is no only £40, you've already paid £50 at this point (half the £100 earlier calculated), therefore you are owed £10.


Adjust that as appropriate and you get there eventually. People get rebates all the time, I've had 4 this year and expect one more (£20 or so) in April once my final tax is calculated.


That's a very basic example.

jobbingmusician

Because of your self employment? You told us in the OP that your total earnings were £12, 189.


The tax on this would be (as Neil said in post 4)


you have to pay income tax on 12189-11500 = 689 (roughly Comms 700)

You have to pay 20% income tax on that £689, which comes to £137.80. You also say 'forgot to mention I added expenses of £45' but I can't understand this. Does that mean that your profit from self-employment was actually £1003 minus £45?* So I'm going to ignore that expenses comment for the time being.



But you had ACTUALLY paid tax of £149 already. So they owe you the difference between what you had paid (£149) and what you owe (£137.50). Yes, on the face of it they owe you £11.50 but the mystery £45 may account for some of that.

*And now for the interesting bit. I AM NOT AN EXPERT! But my understanding is that if your turnover in self employment is under £1000, you don't have to report it or pay tax on it. You may like to consider reducing your turnover by £3.01 (or £48.01, depending on where this £45 actually fits in???) next year. But do clarify this with helpful HMRC - just ask them something like 'I was self emp last year and my turnover was just over £1k so I did a tax return. This year it will be under £1k, do I still have to do a tax return' That sort of thing

katie4

jobbingmusician wrote: »

Because of your self employment? You told us in the OP that your total earnings were £12, 189.


The tax on this would be (as Neil said in post 4)


you have to pay income tax on 12189-11500 = 689 (roughly Comms 700)

You have to pay 20% income tax on that £689, which comes to £137.80. You also say 'forgot to mention I added expenses of £45' but I can't understand this. Does that mean that your profit from self-employment was actually £1003 minus £45?* - yes that's right sorry so £958 profit So I'm going to ignore that expenses comment for the time being.



But you had ACTUALLY paid tax of £149 already. So they owe you the difference between what you had paid (£149) and what you owe (£137.50). Yes, on the face of it they owe you £11.50 but the mystery £45 may account for some of that.

*And now for the interesting bit. I AM NOT AN EXPERT! But my understanding is that if your turnover in self employment is under £1000, you don't have to report it or pay tax on it. You may like to consider reducing your turnover by £3.01 - i am earning more and more each year so this wouldn't be possible, but i will be setting aside 20% for the tax return (or £48.01, depending on where this £45 actually fits in???) next year. But do clarify this with helpful HMRC - just ask them something like 'I was self emp last year and my turnover was just over £1k so I did a tax return. This year it will be under £1k, do I still have to do a tax return' That sort of thing

thanks for your reply

katie4

Comms69 wrote: »

Ill take a wild stab in the dark and say that you had fluctuating hours at some point. HMRC don't know the full tax owed until april, but they do adjust periodically when role / wages change.


Either your initial tax code was wrong and they adjusted part way through the year or they estimated at some point.


Seriously I appreciate this may seem confusing (crap education system)


here's one example, just to keep it simple.


Someone earns £1000 a month, the tax therefore at the end of the year is £100 (£12,000 - £11,500= £500 * 20%)


But 6 months in they drop to £950 a month, thereby £300 on income is lost. (total for the year is therefore £11700. £200 over on the threshold and therefore 20% on £200 is £40) The tax office adjusts it, realises that the tax due is no only £40, you've already paid £50 at this point (half the £100 earlier calculated), therefore you are owed £10.


Adjust that as appropriate and you get there eventually. People get rebates all the time, I've had 4 this year and expect one more (£20 or so) in April once my final tax is calculated.


That's a very basic example.

Thanks yes i was part time and switched to full time part way through the year so that may be why then

katie4

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