Self assessment / self employed

[martinash]

Hi
New to this so be gentle!
i am and have been for a good few years been self employed, in the previous years i have had my accountant to complete my tax return forms but due to recession etc and being out of work for 4 months i have decided to give it a go myself. i am no way experienced in this field but my oh is helping me to complete online. i have completed all so far but not submitted, what i can't understand is that my earnings have 20% tax taken off weekly etc and i pay my NI direct, i know that i also have to pay 8% NI and have calculated my allowable expenses and capital a/c but end of tax form says i still owe tax ? may sound silly to those professionals out there but i would have liked to get some tax back not to owe more!
can anybody explain ? thanks Martin

[Jaykay]

It does depend upon how much you earn. If we assume that your expenses are £5,000 then:-
If your turnover is £15,000 then your profit is £10,000 and the tax deducted was £3,000
If your turnover is £40,000 then your profit is £35,000 and the tax deducted was £8,000

A £10,000 profit will generate a tax bill of around £1,050 so you will have a refund of £1,950

A £35,000 profit will give you a tax bill of £8,050 so you will 'break even'.

So the more you earn, the lower the refund gets. The reason for this is Class 4 National Insurance. Tax is 20% and you are having 20% tax deducted from your income so you think it is being paid. However, Class 4 National Insurance is also due at 8% . So, if your turnover increases by £1,000, your tax deduction is £200. However, the tax (and NI) bill increases by £280 reducing your refund by £80 per £1,000 of increase.

Hope this helps!

[MyAccountantOnline]

Hi Martin

Without knowing your income and expenses it just isnt possible to answer your question.

Wouldnt it be better to spend a few pounds and get an accountant to deal with this for you making sure they have claimed everything possible and got the tax return correct? It may actually end up saving you money.

[mung]

just use a simple solution such as contraccounts.com , you will be able to carry out the bookkeeping while getting the correct figures for the self assessment at the end of the year, the tax will be worked out on the fly, theres a 30 day free trial going at the moment, give it a try and see what you make of it :)

[Williams lester]

just use a simple solution such as contraccounts.com , you will be able to carry out the bookkeeping while getting the correct figures for the self assessment at the end of the year, the tax will be worked out on the fly, theres a 30 day free trial going at the moment, give it a try and see what you make of it :)

If the OP has already input the figures into the HMRC online portal, why would he need to go back and use your system to generate figures to put into the HMRC online portal?? :|

[mung]

If the OP has already input the figures into the HMRC online portal, why would he need to go back and use your system to generate figures to put into the HMRC online portal?? :|

oops, good call! I apologise...

[MyAccountantOnline]

just use a simple solution such as contraccounts.com , you will be able to carry out the bookkeeping while getting the correct figures for the self assessment at the end of the year, the tax will be worked out on the fly, theres a 30 day free trial going at the moment, give it a try and see what you make of it :)

Hi Mung - are you involved with Contraaccounts or just a very happy user? I notice that you are regularly recommending the package.

[elainec100@cheapaccounting]

Hi Mung - are you involved with Contraaccounts or just a very happy user? I notice that you are regularly recommending the package.

Nicola - that would be spam if he was involved with Contraaccounts and I'm sure he / she wouldn't break the rules on that :p:p

[MyAccountantOnline]

Nicola - that would be spam if he was involved with Contraaccounts and I'm sure he / she wouldn't break the rules on that :p:p

One would hope not;):)

[Williams lester]

One would hope not;):)

But you never know! :D

[mung]

haha! I just think its an excellent package, as I do use it, as well as being an affiliate, and want to get as many thanks here as possible :)
I see accountants post actual affiliate/referral links here, now would that would be counted as spam?