self assesment tax return

[jaycee401]

daughter went self employed september 2010, when will she receive her first tax assesment? also can she pay her national insurance monthly by direct debit? can you also pay a certain amount each month for tax or is she best saving so much per month ready for when the demand comes? she has just received a tax rebate of £400 whicj we presume is from when she left her employed job before she went self employed. many thanks for any advice

[boxtops]

You should be able to find the answers on the HMRC website - and re the tax rebate, did she not receive a letter from the tax office, explaining the refund? If not, she needs to phone and ask them to send her a breakdown, just for clarity and for her future self-employed accounts.

[kat1]

Just to add,they are only answering 48% of their calls due to being understaffed! so be aware as it cost me £10!!!

[jaycee401]

thanks for replies, i will check about the tax refund when i see her tomorrow.

[twix123]

Your daughter should have registered with HMRC as Self Employed and already started paying Class 2 National Insurance contributions, which are payable monthly by Direct Debit. Contributions for the 2011/12 tax year start being collected this month for the month of April as they are now being collected 4 months in arrears.

Dependent on her profit, she will also be liable to pay Class 4 contributions, which are worked out at the same time as her Self Assessment tax return.

It is advisable to save the approximate amount of tax payable, as this is charged in arrears, in two tranches, although her first payment will be for the tax year ending 5th. April 2011 and is payable by 31st. January 2012, together with a first payment on account for the tax year 2011/2012 of half of the estimated tax that would be payable. The second payment on account is then due to be paid by 31st. July 2012.

See the following link:

http://www.hmrc.gov.u...ntro/selfemployed.htm

[jaycee401]

Brilliant, thanks twix!

[jaycee401]

she is not vat registered but when we imput the purchase invoices we have a column for total gross vat and total net, when we come to use the figures to fill in her self assesment do we use the gross or net amount? thanks

[twix123]

I've never had to deal with VAT whilst I was self employed, but as Income Tax and Class 4 National Insurance contributions are payable on your net profit, after deduction of allowable expenses, I would think that you would enter net totals (but don't hold me to that!).

If your daughter doesn't have an accountant, she may have to speak to the HMRC tax help line to clarify matters.

[Skyline D]

You do NOT use the net totals in your accounts if not VAT registered. If you are not VAT registered then VAT is a proper business cost. Use gross numbers in all cashbooks, computer packages, tax returns, etc. Ignore the VAT column.