HMRC SA Paying Tax or NIC

Discussion in 'Accounts & Finance' started by rizbit, Apr 17, 2019.

  1. rizbit

    rizbit UKBF Contributor Free Member

    54 0
    After you complete your online self assessment with HRMC website your "profit" after expenses is less than the persona; allowance.

    So based on that you dont have to pay tax on it.

    But when you come to the View Calculation screen it shows a figure of a few hundred.

    How is that calculated? Im sure the tax would be zero based on above, so is the value shown that they asking to pay the NIC class 4 you have to pay is profit is over about £8500 (not exact figure)

    If yes how do you pay this and when do you have to pay it by


    Last question:
    if you work from 'home', you can use the "simplified expenses" to claim for things like bills... but if you pay rent for a rooom used as office and that is covered by "simplified expenses" should you add this on top of the SE or not use SE at all but use full breakdown of expenses.... rent, bills, broadband (im aware of the proportion of business use requirement)

    Thanks
     
    Posted: Apr 17, 2019 By: rizbit Member since: Mar 13, 2017
    #1
  2. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,598 3,279
    If you rent a specific room from a third party solely and exclusively for the business, you claim that, plus the utility bills associated with that room. Simplified expenses is used when you use your home as your office. If you are a sole trader you cannot rent a room from yourself. If you rent a room from a third party they would have to declare the rental income on their tax return.
     
    Posted: Apr 17, 2019 By: Newchodge Member since: Nov 8, 2012
    #2
  3. rizbit

    rizbit UKBF Contributor Free Member

    54 0
    I work from a room in a house i dont own, its shared ownership. I pay rent monthly this goes to the housing agency (the third party).

    If i wasnt working from home id still have to pay this rent. But I do work and only work from the room (which is used solely for office based business (its not open to clients/customers to come in/out etc..)) and im saying the rent is paying for that room, as there are X number of rooms and the rent amount just about covers cost of one room.
     
    Posted: Apr 17, 2019 By: rizbit Member since: Mar 13, 2017
    #3
  4. Newchodge

    Newchodge UKBF Big Shot Free Member

    12,598 3,279
    You what? And in English?

    You pay rent for a property in which you live. You use part of that property for business purposes. You do not pay anyone any separate rent for business premises. Either use simplified espenses or calculate the exact proportion of the whole property that you occupy and pay rent for that is used exclusively for business purposes, and claim that proportion of the total rent you pay.
     
    Posted: Apr 17, 2019 By: Newchodge Member since: Nov 8, 2012
    #4
  5. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,763 2,365
    Posted: Apr 17, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
    #5
  6. rizbit

    rizbit UKBF Contributor Free Member

    54 0
    no one answered the original question

    I assume the value im being told i have to pay is not tax but NIC contributions?


    I decided to use "calculate the exact proportion" method
     
    Posted: Apr 18, 2019 By: rizbit Member since: Mar 13, 2017
    #6
  7. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,763 2,365
    It's difficult not knowing what you are looking at and referring to.

    To see what tax and NI is due once you've entered all necessary income and gains go to the section 'view your calculation' that should then show all sources of income less your personal allowance and the tax and NI due.
     
    Posted: Apr 18, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
    #7
  8. Darren_Ssc

    Darren_Ssc UKBF Regular Free Member

    467 96
    If you haven't paid class 2 contributions on a monthly basis it is added to your tax bill.

    It's a kind of unofficial thing that isn't widely publicised - for obvious reason.
     
    Posted: Apr 18, 2019 By: Darren_Ssc Member since: Mar 1, 2019
    #8
  9. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,763 2,365
    Most people pay Class 2 via Self Assessment but their are some exceptions and if you dont pay via Self Assessment HMRC will send you a bill for payment.
     
    Posted: Apr 18, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
    #9
  10. rizbit

    rizbit UKBF Contributor Free Member

    54 0
    i dont see a breakdown it just gives one figure under
    "Total amount due for 2018-19"

    then theres "First payment on account for 2019-20" those are £0
    and
    "Second payment on account for 2019-20" those are £0
     
    Posted: Apr 18, 2019 By: rizbit Member since: Mar 13, 2017
    #10
  11. Darren_Ssc

    Darren_Ssc UKBF Regular Free Member

    467 96
    That used to be the case Nicola, the letter was often followed up by a threat to pursue the debt that was usually never carried out.

    Now, assuming on does a tax return, the full year's amount is simply added to the tax bill. As I say, it isn't something HMRC actively publicise since some people may take advantage of the extended payment window?

    Accepting I don't know every case, but this is my understanding and was just suggesting it may explain OP's situation.
     
    Posted: Apr 18, 2019 By: Darren_Ssc Member since: Mar 1, 2019
    #11
  12. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,763 2,365
    If you select the option to see the full calculation you will see how the tax and NI due is calculated. I suspect you are just looking at the summary.
     
    Posted: Apr 18, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
    #12
  13. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,763 2,365
    When I said most people pay Class 2 via Self Assessment that's exactly what I meant ie it is added to the tax bill.
     
    Posted: Apr 18, 2019 By: MyAccountantOnline Member since: Sep 24, 2008
    #13
  14. rizbit

    rizbit UKBF Contributor Free Member

    54 0
    ok that makes sense yes it the NIC 2 and 4 payments (9%)
     
    Posted: Apr 18, 2019 By: rizbit Member since: Mar 13, 2017
    #14
  15. Darren_Ssc

    Darren_Ssc UKBF Regular Free Member

    467 96
    OK, understood.
     
    Posted: Apr 18, 2019 By: Darren_Ssc Member since: Mar 1, 2019
    #15
  16. rizbit

    rizbit UKBF Contributor Free Member

    54 0
    so at the end of SA, the calculation for example says you have to pay £400 (Just NI not tax)

    do they email or post you a bill for that or do you pay online?

    for example do you pay using this
    https://www.gov.uk/pay-self-assessment-tax-bill
     
    Posted: Apr 25, 2019 By: rizbit Member since: Mar 13, 2017
    #16
  17. SteLacca

    SteLacca UKBF Ace Free Member

    1,479 288
    HMRC will not email a bill. They may, or may not post one (it seems to depend on how they feel). The due date for payment is 31 January following the tax-year end, and it is your responsibility to make sure that you pay. The link you posted is exactly what you need.
     
    Posted: Apr 25, 2019 By: SteLacca Member since: Jun 16, 2016
    #17
  18. rizbit

    rizbit UKBF Contributor Free Member

    54 0
    Want to pay the NIC using direct debit

    So i went to setup DD
    https://www.tax.service.gov.uk/directdebits/setup

    USing the "A budget payment plan"

    I enter all the details using the UTR + K as the ref number

    But I cant enter an amount, Say I want to pay the full amount of say 1200 in 6 months (so its fully paid before Jan 2020) I take the calue and divide by 6. But then the form says invalid amount entered.

    It only accepts the value if i enter the full amount. Is that right?

    But on the DD form it labels this amount as the regular payment amount, but why setup DD if its going to pay the full amount in one go?

    Or does the DD automatically calculate the amounts each month based on the start and end dates you enter?
     
    Posted: May 3, 2019 By: rizbit Member since: Mar 13, 2017
    #18
  19. Darren_Ssc

    Darren_Ssc UKBF Regular Free Member

    467 96
    I can't remember exactly but I do remember cancelling for some other such annoyance. Instead, I set up HMRC as a payee and do faster payment transfers to my account as and when it suits me over the course of a year.
     
    Posted: May 4, 2019 By: Darren_Ssc Member since: Mar 1, 2019
    #19
  20. rizbit

    rizbit UKBF Contributor Free Member

    54 0
    I have paid the full amount of Tax/Ni

    Can I claim this as an expense on this current years business expenses? :)
     
    Posted: May 8, 2019 By: rizbit Member since: Mar 13, 2017
    #20