Confused with Self-Assessment needs...

Discussion in 'Accounts & Finance' started by Davek0974, Jul 18, 2019.

  1. Davek0974

    Davek0974 UKBF Ace Free Member

    2,472 308
    I retired from full-time work this tax year, i still have my home micro-business so I guess I'm now fully self-employed.

    This years income will be below taxable rate so i should have zero tax to pay this year myself, my pension was set to just below the 1250L rate, that is my only income as i do not take income from my business yet.

    My accountant did last years business accounts and said i need to file a self-assessment return as well.

    I went on-line to HMRC portal and it stated I do not need to do one, I took the questionnaire and again it said i do not need to file one.

    Who is correct??
     
    Posted: Jul 18, 2019 By: Davek0974 Member since: Mar 7, 2008
    #1
  2. UK Contractor Accountant

    UK Contractor Accountant UKBF Big Shot Full Member - Verified Business

    4,652 778
    HMRC . if they want one they will issue a Notice to file a Tax Return.

    If you have income subject to tax that HMRC do not know about then you are required to notify them and file a Tax Return.
     
    Posted: Jul 18, 2019 By: UK Contractor Accountant Member since: Sep 18, 2013
    #2
  3. Davek0974

    Davek0974 UKBF Ace Free Member

    2,472 308
    Ah good that makes sense.

    The only income I have presently is my private pension and they are dealing with tax on that if needed.
     
    Posted: Jul 18, 2019 By: Davek0974 Member since: Mar 7, 2008
    #3
  4. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,924 997
    What level of profits do you make from the self employment?
     
    Posted: Jul 18, 2019 By: STDFR33 Member since: Aug 7, 2016
    #4
  5. Davek0974

    Davek0974 UKBF Ace Free Member

    2,472 308
    Not enough to take any payment yet - ploughing nearly all of it back into company at present in way of equipment etc. Its only a micro-business as well, just something to keep me busy in retirement ;)

    I also have a pretty large directors loan in favour of the business where equipment i previously owned was transferred to the business on startup, which if i recall correctly is not taxable when i take it back?
     
    Posted: Jul 18, 2019 By: Davek0974 Member since: Mar 7, 2008
    #5
  6. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,924 997
    Yes, that's right.
     
    Posted: Jul 18, 2019 By: STDFR33 Member since: Aug 7, 2016
    #6
  7. Victoria_V

    Victoria_V UKBF Regular Full Member

    137 17
    If your business is setup as a sole trader and you earned more than £1,000 annually from your sole trader business, you will have to complete a self assessment tax return regardless of whether you take money out from your business or not.

    https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return


    If your income from self employment is under £1,000, you will not have to declare this income on self assessment as you will be covered by the trading allowance.

    https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#trade


    Even though you may not be paying any income tax on your self employment income( if your total income is under £12,500), you may potentially have to pay National Insurance. National insurance is due if profits from your self employment are above £6,365.

    https://www.gov.uk/self-employed-national-insurance-rates
     
    Posted: Jul 18, 2019 By: Victoria_V Member since: May 29, 2019
    #7
  8. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,924 997
    You missed the bit where they said they had a company.
     
    Posted: Jul 18, 2019 By: STDFR33 Member since: Aug 7, 2016
    #8
  9. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,763 2,365
    @Davek0974 I'd ask your accountant why they feel you need to complete a tax return. He/she may have some information which we don't have here.
     
    Posted: Jul 18, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
    #9
  10. Davek0974

    Davek0974 UKBF Ace Free Member

    2,472 308
    Thanks all, good stuff always ;)

    Yes its a Limited company, has been for a few years now.
     
    Posted: Jul 18, 2019 By: Davek0974 Member since: Mar 7, 2008
    #10
  11. Davek0974

    Davek0974 UKBF Ace Free Member

    2,472 308
    I did and they just said it was something you need to do as a director.
     
    Posted: Jul 18, 2019 By: Davek0974 Member since: Mar 7, 2008
    #11
  12. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,924 997
    Rubbish.
     
    Posted: Jul 18, 2019 By: STDFR33 Member since: Aug 7, 2016
    #12
  13. Davek0974

    Davek0974 UKBF Ace Free Member

    2,472 308
    Fair enough, I'm not going to argue with them, thats why i chose to check it out with HMRC portal ;)
     
    Posted: Jul 18, 2019 By: Davek0974 Member since: Mar 7, 2008
    #13
  14. STDFR33

    STDFR33 UKBF Big Shot Free Member

    3,924 997
    Yeah appreciate that. But it's pretty fundamental to determine who requires to complete a tax return. What else are they getting wrong?
     
    Posted: Jul 18, 2019 By: STDFR33 Member since: Aug 7, 2016
    #14
  15. Davek0974

    Davek0974 UKBF Ace Free Member

    2,472 308
    Sorted, I just rang them and explained and they felt certain that the advice would have been that I "might" need to do a SA return - Its possible I may have mis-heard them when they were doing my accounts before. I explained the status of my income, tax coding etc and they were satisfied i did not need to do one this year.

    Seems reasonable.
     
    Posted: Jul 18, 2019 By: Davek0974 Member since: Mar 7, 2008
    #15
  16. SteLacca

    SteLacca UKBF Ace Free Member

    1,474 287
    This is wrong!

    The only requirement to file a self-assessment Tax Return is found at S.8 TMA 1970, which boils down to if HMRC have sent you a notice to file a Return. There is no other trigger.

    The requirement to notify chargeability is at S.7 TMA 1970, which only requires notification if you have income giving rise to a tax liability that is not taxed at source.

    Never believe what you read on .gov.uk. It's full of errors.
     
    Posted: Jul 18, 2019 By: SteLacca Member since: Jun 16, 2016
    #16