Should I be paying tax?

DazednConfused1980

Hi

Wondering if anyone can shed some light on my situation please. I'm about to put in my first ever self assessment tax return :eek: - I started self employment on 1 January 2018.

I have two sets of employed income in the 2017/18 year - each one is under the personal income tax threshold (one is the last of my maternity pay from my old employer). In total, these are £11,519, so just over the threshold together. On top of this, I earned £750 in self employed earnings in that year, so my overall earnings were £12,269.

I've just had an article sent to me that appears to say that new startups have been given a tax allowance of £1,000. With this in mind, will I have to pay tax for 2017/18? My self employed earnings are likely to be around £3,500 for 2018/19, if this makes any difference to the answer. I'm rather confused I understand I have to do the return anyway, but not sure I trust the outcome being correct, and I'd like to understand what I'm doing, so I don't get fleeced.

TIA for any guidance.

Dazed_and_confused

Yes.

You will pay tax on income of either £11,519 (if you are eligible to not declare the self employment income in 2017:18) or £12,269 if you declare the self employment income.

The actual tax payable (or refundable to you) will all depend on any tax paid during the year on your employment income.

DazednConfused1980

Thank you - the similar user name threw me for a moment there!

I haven't paid any tax at all on my employment income, as both are under the threshold individually. I just spotted the thread from MSE on self assessment returns and went through the Gov questionnaire about whether or not I need to file, and it came out saying I didn't, but I'm not convinced. I'd rather file and find out I don't need to pay, than not file and get in trouble! Plus we want to apply for another fix on our mortgage, so I think I'll need my filing for that.

Thanks for the reply

Dazed_and_confused

It will be more hassle avoiding filing than actually filing it, especially now you've got this far.

But unless there is something you haven't told us you will have some tax to pay. Not very much admittedly but at least £3.80.

00ec25

employment income 11,519 less personal allowance 11,500 = 19 taxable

self employment income 750 less trading allowance 1,000 = zero

total taxable income 19 + 0 = £19

tax payable £19 x 20% = £3.80p
you state that no tax has been deducted on pay from either employment job so there is nothing to deduct from the above tax bill as being already paid, so you'll need to find out if HRMC can be bothered with chasing £3.80 if you chance it and don't bother paying.

PS check if you've donated in 17/18 under gift aid. If you have, you'll get a bill to repay the tax relief if you have not paid enough tax to cover more than approx £19 of donations

polymaff

Just be sure that you are eligible for the trading allowance. Was the £750 what you were actually paid, or your profit after expenses and allowances?


EDIT:

DazednConfused1980 wrote: »

... new startups have been given a tax allowance of £1,000.

Not that I'm aware of.