In a muddle with current Self Assessment.

[jam_the_doughnut]

Hi I'm doing my self assessment for the 2015-16 year but I'm confused with what to put down due to issues from the previous accounting year.

I started self employment (contracting) on 17/11/2014 and companies house and HMRC said my first accounting period would run from
17/11/2014 - 16/11/2015

My next period ran as below. In this period, I did no trade whatsoever so profit / loss is nil.
17/11/2015 - 30/11/2015

I stopped self employment - 1/12/2015 and began employment 14/12/2015

On my first Self Assessment (Jan 2016) it asks when my books are made up to which I put 17/11/2014 - 30/11/2015

I think I made a mistake at the following point, as when it says to state your income, I only included the period up to 05/04/2015.

This was £9514.

From 05/04/2015 - 30/11/2015
The remaining turnover was £20304

Last August, I filed two CT600s for the two periods stated, and in the 17/11/2014 - 16/11/2015 filing I put the total turnover made in that period, which was the full £29818.

Can I just put the £20304 figure as my turnover for the current self assessment, or should I call the tax office to explain.

I'm worried they will see some sort of discrepancy, and I'm trying to avoid any penalty stings later in the year.

I've already paid all the tax for the 2014-15 tax year.

Thanks for any help.

 

[STDFR33]

Why are you completing the self employment pages if you are operating via a limited company?

 

[Louisa@AardvarkAccounting]

Yes, that's what I was going to say. You've mentioned filing CT600's - which is something that you do when you are running a Ltd company. Therefore on your self assessment you would only declare the personal income that you have taken from the company - salary & dividends.

If you are self employed, then you don't file CT600's, as instead all of the income and expenses are detailed on your self assessment of which you then pay personal tax on your income.

So, you might want to check which one you are first, see what periods relate to what in terms of self employed v Ltd and then prepare the self assessment return on that basis.

 

[SteveHa]

To clarify the previous replies, you did not start self-employment, you incorporated a limited company and worked for that. You and the company are separate legal entities and each of you has your own, separate and distinct tax obligations.

You will have received your "pay" from your company either as salary (if a PAYE scheme was set-up and correctly administered), dividends or a combination of both. You need to complete an employment page to include any salary from the company, and enter the dividends on page three.

The company accounts are nothing to do with your personal Return.

 

[jam_the_doughnut]

Apologies on the terminology. Yes I set up a Ltd company.
In the first self assessment, I declared £9000 as the salary for the 14-15 period.

This 15-16 period I want to declare £7000 as a dividend and again £9000 as salary.

 

[STDFR33]

So what's your question?

Salary or dividends won't be recorded as turnover anywhere on your tax return. They'll be recorded as salary and dividends in the relevant sections.

 

[jam_the_doughnut]

Ok thanks...Yes forget all the above pretty much...Not writing clearly as have many things other than this on my mind...Have now checked figures and terms so will try to give a better representation.

May need to find the cash to get an accountant's help.This is a bit of a mess and I'll probably have to pay some penalty.

I think I need to register for PAYE for being a director and employee of my ltd company, though my salary was less than the £10600 personal allowance and this was my only employment...I've read conflicting opinions so clarity would be good.

The first tax year, I just recorded the profit for the company between 17-11-2014 - 05-04-2015, on my self assessment, which amounted to £9034 in this period as I didn't take a salary (I was employed earlier in the year and I stated the figures from P60 as required).

Now the period 2015-16 period I earned gross £20664, with net profit of £8234.

On my CT600, I stated a salary of £9000 and £3430 in travel expenses. I also stated a £7000 dividend.

The company accounting period ran from 17-11-2014 - 16-11-2015 and 16-11-2015 - 30-11-2015. The Ltd was my only employment in these periods and I ceased trading activities after the last accounting period.

So now to my self assessment for the 2015 - 16 period.

I know how to put down the company profit, and the dividend income.

My questions are:
Do I put down, my Ltd company as an employer in addition to my current employer to declare salary?

If I have to register for PAYE now, will I submit files for each month between 06-04-15 to 30-11-15 despite the fact I took one salary payment just before the last day in the accounting period?

What penalties am I likely liable for?

Apologies for the roundabout way of getting here. Appreciate any help.

Happy to clarify anything further if it will help. Will be calling the tax office for advice also.

Thanks.

 

[STDFR33]

If you pay a salary above the LEL (£5824), then you must operate a PAYE scheme.


The first tax year, I just recorded the profit for the company between 17-11-2014 - 05-04-2015, on my self assessment, which amounted to £9034 in this period as I didn't take a salary (I was employed earlier in the year and I stated the figures from P60 as required).
Well. that's the company's profit, and nothing to do with your self assessment. £9034 should be nowhere near your tax return.

Will be calling the tax office for advice also.
Don't waste your time. If you manage to get through, the advice will probably be wrong.

 

[jam_the_doughnut]

Thanks accountancy lab for response

On the previous self assessment, under Business income, I filled out box 15 Your turnover and entered £9154, then under Business expenses, box 20, I entered £120.

I believe Net profit, box 47 was pre-calculated, and this is where the £9034 is recorded.

Are you saying I should not have completed this whole Self employment section that is generated by ticking the self employment box under What makes up your tax return?

 

[TheCyclingProgrammer]

Short version: you've made a complete and utter mess of this. You aren't self-employed, you should have never filled out a self-employment sheet, your company profits have nothing to do with your self-assessment and you should have been processing your salary via PAYE. I'm also unsure what you've put your dividends on your corporation tax return as these come out of post-tax profits.

For each self assessment that covers a period when you were running your Ltd company, you should have been filling out an employment sheet that covers your directorship and entering your salary figures that should have been on the P60 you would have had if you'd been running a payroll. There should have been no tax due on this either because it was below the personal tax threshold or it had already been collected via PAYE.

You would have also declared any dividends you have taken on your tax return in a separate section (dividends from UK companies). You may or may not have owed tax on these but unlikely if below the higher rate threshold. Have you correctly declared those dividends, with the right paperwork (company minutes + vouchers) and was there enough post-tax (CT) profit to take those dividends?

You need to forget about sorting this out yourself or calling the tax office. You need to engage an accountant and pay them to sort out the mess. Its hard to work out if you've over or underpaid income or corporation tax - it could be either to be honest.

 

[TheCyclingProgrammer]

I'm also wondering...who has been preparing your company accounts and your corporation tax return? Have you done that yourself as well? Have you submitted accounts to companies house and HMRC? Have you remembered to submit annual returns to companies house?

 

[STDFR33]

Thanks accountancy lab for response

On the previous self assessment, under Business income, I filled out box 15 Your turnover and entered £9154, then under Business expenses, box 20, I entered £120.

I believe Net profit, box 47 was pre-calculated, and this is where the £9034 is recorded.

Are you saying I should not have completed this whole Self employment section that is generated by ticking the self employment box under What makes up your tax return?

That's exactly what I'm saying. The self employment pages are not relevant to you.

 

[jam_the_doughnut]

Thanks to you both. I've arranged to see an accountant recommended by a friend in the next few days. I've briefly explained the situation and they just said to bring all paperwork to the meeting and that they will be able to file my self assessment for this year and sort the past mess.

I have been preparing my company accounts and corporation tax returns to HMRC and companies house.

Thanks for the advice.

Cheers.

 

[STDFR33]

Good luck, hope you get it all sorted.

 

[jam_the_doughnut]

Thanks all...Saw an accountant yesterday...Lovely lady.

Some shaking of her head, and saying 'why did you do that for?' (still smiling though).

Result is she fixed previous filing and submitted current one, and got me back over £1000 in overpaid tax.

Result.

Thanks again...Lessons learned.

 

[STDFR33]

Thanks all...Saw an accountant yesterday...Lovely lady.

Some shaking of her head, and saying 'why did you do that for?' (still smiling though).

Result is she fixed previous filing and submitted current one, and got me back over £1000 in overpaid tax.

Result.

Thanks again...Lessons learned.

£1000 makes the accountancy fees seem cheap I bet!

Glad you got it sorted quickly.

 

[justintime]

A classic example of why accountants are worth that "expense"