HMRC SA Paying Tax or NIC

Discussion in 'Accounts & Finance' started by rizbit, Apr 17, 2019 at 2:07 PM.

  1. rizbit

    rizbit UKBF Contributor Free Member

    50 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 at 2:07 PM By: rizbit Member since: Mar 13, 2017
    #1
  2. Newchodge

    Newchodge UKBF Big Shot Free Member

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    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 at 2:13 PM By: Newchodge Member since: Nov 8, 2012
    #2
  3. rizbit

    rizbit UKBF Contributor Free Member

    50 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 at 2:22 PM By: rizbit Member since: Mar 13, 2017
    #3
  4. Newchodge

    Newchodge UKBF Big Shot Free Member

    11,524 2,967
    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 at 2:26 PM By: Newchodge Member since: Nov 8, 2012
    #4
  5. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

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    Posted: Apr 17, 2019 at 4:40 PM By: MyAccountantOnline Member since: Sep 24, 2008
    #5
  6. rizbit

    rizbit UKBF Contributor Free Member

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    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 at 2:58 PM By: rizbit Member since: Mar 13, 2017
    #6
  7. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

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    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 at 3:06 PM By: MyAccountantOnline Member since: Sep 24, 2008
    #7
  8. Darren_Ssc

    Darren_Ssc UKBF Regular Free Member

    149 26
    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 at 3:20 PM By: Darren_Ssc Member since: Mar 1, 2019
    #8
  9. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

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    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 at 3:25 PM By: MyAccountantOnline Member since: Sep 24, 2008
    #9
  10. rizbit

    rizbit UKBF Contributor Free Member

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    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 at 3:30 PM By: rizbit Member since: Mar 13, 2017
    #10
  11. Darren_Ssc

    Darren_Ssc UKBF Regular Free Member

    149 26
    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 at 3:43 PM By: Darren_Ssc Member since: Mar 1, 2019
    #11
  12. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

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    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 at 4:01 PM By: MyAccountantOnline Member since: Sep 24, 2008
    #12
  13. MyAccountantOnline

    MyAccountantOnline UKBF Legend Full Member

    12,543 2,337
    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 at 4:05 PM By: MyAccountantOnline Member since: Sep 24, 2008
    #13
  14. rizbit

    rizbit UKBF Contributor Free Member

    50 0
    ok that makes sense yes it the NIC 2 and 4 payments (9%)
     
    Posted: Apr 18, 2019 at 4:29 PM By: rizbit Member since: Mar 13, 2017
    #14
  15. Darren_Ssc

    Darren_Ssc UKBF Regular Free Member

    149 26
    OK, understood.
     
    Posted: Apr 18, 2019 at 4:39 PM By: Darren_Ssc Member since: Mar 1, 2019
    #15