Tax Return

[iloveglee]

Can anyone help me before I have to battle with hmrc.  I have just completed my husband's tax return.  He is retired on state and private pensions, neither of which put him anywhere near the higher tax bracket.

He has a small self employed business, and his profit for this for 2022 to 2023 was £3283.  This additional income doesn't put his imcome to the higher tax bracket either. He is over state pension age so isn't due to pay any national insurance contributions.  So far as I understand it, he pays 20% on the profit, a sum of £656.  The calculation when done brings up a figure of £911.  This doesn't include any payment due on account for the next tax year.  

I have gone through the return several time to make sure i am not missing something.  For him this is a return to self employment after covid, and my experience of the tax returns before this always brought a figure which agreed with my own. 

If anyone can think of something I have missed, or done wrong, I'd be really grateful to know.  Eventually I may have to battle hmrc but would really rather know that this isn't something I've done, or not done.  

Thanks. 

[Hymie]

What are hmrc disputing about your figures?

[newmodarmy]

What makes up the difference between the £656 and £911 figures as I don't see where that latter figure comes from. Does he already have tax deducted at source from his private pension? His state pension will also have to be taxed at some point.

Is there any interest on savings or investments to declare too?

[jno]

Hymie, I think this is anticipatory, iloveglee is just asking if she's got everything right before she sends it off.

[Maydup]

If you add together his state and private pension and deduct his tax allowance, how much do you get? 

[iloveglee]

I have gone over it again.  I have all the figures from his p60, and the notice of coding for his allowance, and the amount of his state pension.  I have re-checked all these, and re-checked my addition of  all the income, including the profit from the self employment, and  re-checked the deduction of tax  paid already.  There haven't been any mistakes made in my calculations, which is that he owes £656.  The calculation on the hmrc online tax return shows he owes £911.  The difference between the two figures doesn't mean anything to me. 

I can see that I am going to have to contact them, oh joy.  Well, my husband is!!  I might be doing the tax return, but they will want to speak to him.  Hmrc used to have a nice little online chat, but now it seems to be just a bot that sends not entirely useful links.  

That's a nice little job to spend most of the day on Monday.  

I have already discovered that he doesn't have to pay any national insurance contributions due to his age, so it's not related to that.  

[jno]

they used to have tax advice offices on the high street, iloveglee. I went there once to prepare my return, showed it to the man behind the counter who confirmed I'd done everything right, and gave him a cheque for £1000 I owed, all on the spot.

A year later I got a bill for £1000 from HMRC. He'd evidently just chucked my cheque in the bin...

[ToraToraTora]

She is talking about the online tax return's calculation based in the figures she input.

The only way we can help is if you give us all the figures you have entered and their descriptions.

[Maydup]

Your calculation implies his  only taxable income is the £3283 profit on the self employment.

His state pension plus his private pension plus any interest on savings is therefore less than his tax allowances

Is that correct?

 

[newmodarmy]

I don't think what' she's saying, maydup- she accepts some tax is due as the personal allowance is exceeded (it's the higher threshold she says is not reached)

[Maydup]

You're looking for £1275.

20% of which is the difference between £911 and £656. 
 

Is his tax code definitely as you'd expect?

[ToraToraTora]

can you let us know what the tax code is.

[iloveglee]

Yipee, Maydup, thanks for this.  You have pointed me in the right direction.  I have gone back into the calculation, and there is  a missing £1275 of tax allowance.   His personal allowance should be this amount more than a regular one, as I have transferred some from mine to his, I don't pay tax so have some spare.  We did it years ago so it's not like something which hasn't reached the system yet. 

This is very strange though.  His latest notice of coding shows this extra personal allowance, and a projected tax liability for the next year also shows it.  But the online tax return does not.  I have tried to use the HMRC online chat but it's only a bot that doesn't understand.  No agents are available.

The only thing he can do now is call them.  Oh joy.  Who has that amount of time to spare.  But there is no alternative other than paying too much and trying to get it back later.  

[Redhelen72]

Have you tried the self help tools?

https://www.gov.uk/guidance/help-online-for-self-assessment#ask-for-help-online

[iloveglee]

I've gone through everything I can find. Logging into the tax account shows the transferred allowance is there and when it was added - 2015. It's reflected in this years notice of coding as it has been since then. But it's not reflected in the online tax return calculation and I've no idea why. I've been through it several times. 
There seems to be no way I can correct it. 

[Maydup]

Pleased to have helped. At least when you phone them you'll know exactly what the problem is. 
 

 

[iloveglee]

Let's hope we're not holding on for hours for them to answer 

[andres]

Has he been paying the self-employed stamp of £3-45 (after retirement age )weekly until the end of the tax year he worked. 

[Hymie]

With such a small amount of money (tax) at stake, I don’t think HMRC will give the submission a second look – if they do, they will lose more time & money than it is worth.

[iloveglee]

Hymie - not sure what you mean due to such a small amount, are you suggesting that he doesn't complete a tax return at all?  HMRC knows he is due to complete one, and if he doesn't complete it by 30th January, not only will there be interest applied to the amount due, there is also a fine of £100, and that's just the start.

Thannks to maydup, I have identified the issue.  It's nothing to do with national insurance, which I did wonder at first, but have clarified this with HMRC.  It's simply that for some reason the self assessment part of the website, is not recognising the increased personal allowance, even though every other part does recognise it. 

[Canary42]

HMRC is a mystery.  Several years ago they sent me a cheque for £512 as what they claimed was refund of overpayment.  

A couple of weeks later they sent me a demand for £512.

 

Left hand, right hand, sprung to mind.