I am filling in my Tax returns: have earned £33818 as employed and £3000 as self employed work,my question is?
1.should I add up both to calculate my total income? 2. from what figure should i subtract my basic allowence of 5035 £? 3. do i fall in 40% band? 4.should i pay 300£ to an accountant to fill my tax returns? Thank you in advance.
United Kingdom - 6 Answers
People Answers, Critics, Comments, Opinions :
Answer 1 :
Pay the accountant... it'll probably work out cheaper in the long run.
Answer 2 :
Pay an accountant. Honestly, they will save you more than they will ever cost.
Answer 3 :
The way tax is calculated it takes account of all income from all sources including employment, self employment, savings, investments etc. There are different rates applicable to different types of income. The effective management of these rates is what gives you the best combination and tax savings. For example the rates under FA 2006 (that's the Finance Act 2006 for tax from April 2006 to April 2007 tax year) are as follows: RATES OF INCOME TAX (Employment income) The rates for 2006–07 are as follows: Starting rate £1 to £2,150 10% Basic rate £2,151 to £33,300 22% Higher rate £33,301 and above 40% Both may need to be added to get your income. However, there may be some expenses claimable against your self employment income, which could reduce your tax bill. This aspect is a bit complicated and unless and until one knows the details of your affairs (which I don’t advice on this forum), one may not be able to advice your correctly. A main difference may be in your NI for the income from employment and self employment. You will fall in the 40% income bracket for any income above £33,301 amount. But do remember that tax is progressive you pay no tax on the amount on your tax code, 10% on the next 2150 or so, 22% on next 31150 (that’s 33,300-2150) and finally, 40% on income above 33,301. If you have income from savings or investments, these are taxed at different rates. Should you pay an accountant for your tax return? You earn only 3000 from self employment. The income from employment would have been taxed at source under PAYE. To pay £300 to a tax consultant means you are paying 10% on your self employment income. But then, you do not want to get into trouble with the tax office. There are schemes for self employed people, and companies who help them prepare payslips and administer their tax for them. Plus you could fill your self assessment returns yourself and submit to the tax office. You must however be aware of various statutory deadlines. Whether or not you choose to get an accountant or do it yourself, the law says the responsibility for accurate returns rest on you. Getting an accountant could save you penalty fees on meeting the deadline. Your accountant should be able to add value to your managing your tax affairs. It’s a matter of judgement for you to determine how much this service is worth to you.
Answer 4 :
you dont subtract the basic allowance - the tax office do that. and yes your total income is both added together and yes you probably eould be better paying an accountant if you cant work the form out for yourself as it is pretty self explanitory.
Answer 5 :
If you're new to self employment, you can go on a FREE course run by HM Revenue & Customs. I did and it's good, but I'm still getting an accountant to do it all for me!
Answer 6 :
Yes The total No The fee for this level should only be £100-150. It's only 30 minutes to an hour, assuming you S/E records are straightforward.
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