Trading allowance and self assessment 3 October 2022 at 12:36PM in Cutting tax 9 replies 105 views

Mildred22

advised on small biz site to post here : grateful for any advice 

helping a relative sort out a tax query, suspect it is straightforward we just can't find the answer...

Employed all of 21/22 - also had about £1200 in payment from abroad for freelance work - added this as "income" in the online tax account and HMRC have amended the tax code for 22/23 to take 20% off.

Now realise could have used the trading allowance to have £1000 tax free - is it possible to now do self assessment for 21/22 and then claim it ? do you register as employed and fill in SA100 and the SA103s ?

Dazed_and_C0nfused

Mildred22 said:

advised on small biz site to post here : grateful for any advice 

helping a relative sort out a tax query, suspect it is straightforward we just can't find the answer...

Employed all of 21/22 - also had about £1200 in payment from abroad for freelance work - added this as "income" in the online tax account and HMRC have amended the tax code for 22/23 to take 20% off.

Now realise could have used the trading allowance to have £1000 tax free - is it possible to now do self assessment for 21/22 and then claim it ? do you register as employed and fill in SA100 and the SA103s ?

Your 2022:23 tax code is nothing to do with the tax owed for 2021:22.

The new tax code is to provisionally collect additional tax due for 2022:23 on the assumption that the same income will be received again in the current tax year.

You should check with HMRC what the correct option is here but Self Assessment is likely the correct option.

sheramber

If HMRC have included it on his code number for 22/23 then it would appear they are treating as a payment made in 22;23.

What date did he receive the payment?

It it was paid prior to April 22 he needs to  register with HMRC and complete a self assessment tax return for 2122. 

He needs to complete the return with all his income, not just the freelance income, so will need to complete employment pages as well as self employment pages.

Jeremy535897

See https://www.gov.uk/register-for-self-assessment/self-employed

The deadline is 5 October 2022 for businesses started in 2021/22.

If the sales of the business were £1,000, either the actual expenses of the business, or £1,000, may be claimed, but not both.

Mildred22

sheramber said:

If HMRC have included it on his code number for 22/23 then it would appear they are treating as a payment made in 22;23.

What date did he receive the payment?

It it was paid prior to April 22 he needs to  register with HMRC and complete a self assessment tax return for 2122. 

He needs to complete the return with all his income, not just the freelance income, so will need to complete employment pages as well as self employment pages.

thanks - It was received 21/22 - agree sounds like they are treating it as a 22/23 payment

Mildred22

thanks for posts - sounds like we were coming to the right conclusions - register for SA (by Wednesday) - fill in SA100 when UTR arrives and then add in a self-employed page. Presume will need to keep doing SA if gets small amounts of freelance work and they will balance out over time

Mildred22

Bit more help please!

When going to register is it?

• self-employed or a sole trader
• not self-employed

purdyoaten2

Mildred22 said:

Bit more help please!

When going to register is it?

• self-employed or a sole trader
• not self-employed

If you are claiming the trading allowance you should definitely be registering as self-employed.

sheramber

A sole trader is self emplyed

purdyoaten2

sheramber said:

A sole trader is self emplyed

Yes - but the two options are as described by Mildred22