Anyone able to help me with my tax return please..

[Jelly Baby]

Ok it's almost Jan and i need to get my 09-10 tax return done, i'm only up to my income sorted and 3 months worth of my expences added up..eeek!

Prob i have is like every year how much tax i'm going to roughly pay and know someone helped me with this last year..Pauline was it you..can't remember?! Anyway i have my income and expence (well will have if anyone is able to help!) and wondered if you could let me know what i need to have expence wise each month so i dont get too clobbered as not sure ive put enough through.

I would rather do this by pm so let me know

Thanks

Just looked back and Debbie it was you! I have real problems remebering which way round we deduct things too and cant see that from some of your messages! I have another job too to complicate matters.

[MrAnchovy]

OK, it works like this:

Add up your total childminding income for the year. This goes in the Self Assessment part of your tax return - you can download a form which looks like the online form here (http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=HgZl_CADaKU&formId=3182), together with some more comprehensive notes. The box for this is under Business Income called Your Turnover.

Work out 10% of your total childminding income. This is the amount you are allowed for wear and tear of your home furnishings, carpets etc.

Add to this all your other childminding expenses - see elsewhere for what you are allowed: most of these are fairly simple except motoring costs and household bills where there are specific rules you have to follow.

Your total expenses also goes in the childminding section: you can ignore the boxes that break this down into different categories and just put the total in Box 19 - Total Allowable Expenses. The online form will then calculate your net profit (or loss) and put it in the appropriate box.

If you have made any major purchases for childminding (computer, outdoor play equipment etc.), don't include these in your expenses. Instead you can claim these in box 22 - Annual Investment Allowance. Note that you cannot claim for building work or a car in this way.

You should then have your total taxable profits (or loss). You can calculate how much Class 4 NI will be due which is 9% of any profit over £7,225.

The online form will bring your total taxable profit or loss over to the main SA100 return - again you can see a paper version of this with more detailed notes here (http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=ZrJXAG2mt_0&formid=2999).

You will also need to fill in an Employment section. You will need your P60 to do this (and the P45 if you left a job during the year). The paper version and notes are here (http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=UPl66YGe3Mo&formId=3181).

All your tax laibilities will be calculated automatically, but if you add up your total income and take off £7,475 you should have to pay 20% on the rest.

This is of course much simplified and will not apply in every case but the forms and guidance I have linked to will cover those exceptions.

Things that really annoy me

I have included this because some 'advice' that is given to childminders can cause confusion, so to clear a couple of things up:

Wear and tear
You do NOT take the 10% wear and tear allowance off your income. You calculate it as 10% of your income and then add it on to your expenses.

Personal allowance
You do NOT take your personal allowance of £7,475 off your income or include it in your expenses. Ignore it until the very last stage.

[Jelly Baby]

Thankyou so much great reply, again thinking ive done it right but not sure if i pm you could you see what figure i get if i send you the ones i now have as have worked out income and expenditure.

I have at the mo a taxable figure of just over £7k which im panicking about.

Thanks

[MrAnchovy]

... to answer your question on how much tax you are going to pay, the easiest thing to do is to fill in the online return and let it work it out for you!

You can do this with estimated figures now, you don't have to submit it until you have got everything accurate.

[MrAnchovy]

Thankyou so much great reply, again thinking ive done it right but not sure if i pm you could you see what figure i get if i send you the ones i now have as have worked out income and expenditure.

I have at the mo a taxable figure of just over £7k which im panicking about.

Thanks

It's a bit more complicated than that because of your other job: if you earned more than £130 a week you will have paid tax in that job which will reduce the bill: this will be shown on your P60.

As I say, the best thing to do is just fill it in online and see what it says, nothing is sent to HMRC until you confirm it is complete.

[Jelly Baby]

Ok thanks will do. Does anyone have a rough idea of what it will be at a guess..roughly!! i know i have another job but worse case scenario?

[sarah707]

For normal childminding accounts you will pay tax on everything you have earned over the threshold for 2010-11 which is £6475 according to this document here -

http://www.hmrc.gov.uk/rates/it.htm

So if you have earned £8000 after you have taken off your expenses you will pay tax on...

£8000 - £6475 = £1525 @ 20% which is a tax bill of £305

If you have earned £5000 after expenses you will not pay any tax because you have not earned the threshold.

If you have earned £14000 after you have taken off your expenses you will pay tax on...

£14000 - £6475 = £7525 @ 20% which is a tax bill of £1505.

Tax should be paid on your other job. However sometimes they mix it up and you get some of your allowance off the paid job and some off the self employment which makes it more complicated.

If you have earned more than £5,715 (for 2010 / 2011) after expenses you will also have to pay class 4 national insurance according to this document here -

http://www.hmrc.gov.uk/rates/nic.htm

Hth :D

[Jelly Baby]

Ok well im panicking big style..

Put in my employed job, my childminding with expenses taken off and the end result is a payment due by the end of Jan of £3748 and another payment on account of £1249

Sarah thought the allowance was £7470?

HELP!!

It says profit, Ni and student payments..understand the bits apart from student payments soes it normally say that?

Def need to get my expenses up i think..feel ill as havent got £4k.

[Jelly Baby]

Ok confuses so will put what i did here..

Childminding £22,890

Wear & tear £2289

Expences £9670

Employed £2751

So £22,890 - the wear & tear and expenses makes £10,931

add the £10,931 with the employed £2751 gives me £13682

Minus the allowance of lets say £6475 (hoped it was higher)

Gives me a total of £7202 to be taxed on..? Hoping my return is wrong somewhere..

[MrAnchovy]

Ok confuses so will put what i did here..

Childminding £22,890

Wear & tear £2289

Expences £9670

Employed £2751

So £22,890 - the wear & tear and expenses makes £10,931

add the £10,931 with the employed £2751 gives me £13682

Minus the allowance of lets say £6475 (hoped it was higher)

Gives me a total of £7202 to be taxed on..? Hoping my return is wrong somewhere..

OK, £10,931 is correct:
Class 4 NI on £10,931 - £5,715 = £5,216 @ 8% = £417
So is £13,682:
Tax on £13,682 - £6,475 = £7,207 @ 20% = £1,441

Total tax and NI £1,858 so I am not sure where £3,800 comes from!

At this level you would normally make a payment on account of £929 as well, which makes £2,788 in total.

You could appeal against the £929 POA because it is only so high because your job is not deducting tax - probably best to look at the situation for 2011/12 as well.

[MrAnchovy]

The £3,748 is presumably £2,499 plus a POA of £1,249.

I calculated £1,858 which is £641 different, which implies (grossing up for 20% tax and 8% ni) £2,290 extra profit. Bingo - you have missed out your wear and tear on the return. Add it to the expenses to give £11,959 - that is the figure that goes in the Total Expenses box.

[sarah707]

Sarah thought the allowance was £7470?.

That's for this years' figures (2011 - 2012)... I think you are doing your 2010-2011 accounts which use the lower figure.

Hth :D

[Jelly Baby]

OK, £10,931 is correct:
Class 4 NI on £10,931 - £5,715 = £5,216 @ 8% = £417
So is £13,682:
Tax on £13,682 - £6,475 = £7,207 @ 20% = £1,441

Total tax and NI £1,858 so I am not sure where £3,800 comes from!

At this level you would normally make a payment on account of £929 as well, which makes £2,788 in total.

You could appeal against the £929 POA because it is only so high because your job is not deducting tax - probably best to look at the situation for 2011/12 as well.

They want £2499 and £1249 making the £3748 then another £1249 in july. Going to go back over and check everything and add on the wear and tear that yes i forgot!

[Jelly Baby]

OK, it works like this:

Add up your total childminding income for the year. This goes in the Self Assessment part of your tax return - you can download a form which looks like the online form here (http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=HgZl_CADaKU&formId=3182), together with some more comprehensive notes. The box for this is under Business Income called Your Turnover.

Work out 10% of your total childminding income. This is the amount you are allowed for wear and tear of your home furnishings, carpets etc.

Add to this all your other childminding expenses - see elsewhere for what you are allowed: most of these are fairly simple except motoring costs and household bills where there are specific rules you have to follow.

Your total expenses also goes in the childminding section: you can ignore the boxes that break this down into different categories and just put the total in Box 19 - Total Allowable Expenses. The online form will then calculate your net profit (or loss) and put it in the appropriate box.

If you have made any major purchases for childminding (computer, outdoor play equipment etc.), don't include these in your expenses. Instead you can claim these in box 22 - Annual Investment Allowance. Note that you cannot claim for building work or a car in this way.

You should then have your total taxable profits (or loss). You can calculate how much Class 4 NI will be due which is 9% of any profit over £7,225.

The online form will bring your total taxable profit or loss over to the main SA100 return - again you can see a paper version of this with more detailed notes here (http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=ZrJXAG2mt_0&formid=2999).

You will also need to fill in an Employment section. You will need your P60 to do this (and the P45 if you left a job during the year). The paper version and notes are here (http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=UPl66YGe3Mo&formId=3181).

All your tax laibilities will be calculated automatically, but if you add up your total income and take off £7,475 you should have to pay 20% on the rest.

This is of course much simplified and will not apply in every case but the forms and guidance I have linked to will cover those exceptions.

Things that really annoy me

I have included this because some 'advice' that is given to childminders can cause confusion, so to clear a couple of things up:

Wear and tear
You do NOT take the 10% wear and tear allowance off your income. You calculate it as 10% of your income and then add it on to your expenses.

Personal allowance
You do NOT take your personal allowance of £7,475 off your income or include it in your expenses. Ignore it until the very last stage.


So my income say £22,350 i dont take £2235 off how do i do it, have to say its how i have done it and been showed every year for the last few so am confused even more now! Really getting stressed out about this lot tbh.

[MrAnchovy]

Total income £22,350 (A)

Wear and tear allowance @ 10% (A x 10%) £2,235 (B)
Allowable expenses before wear and tear £9,670 (C)
Total allowable expenses (B + C) £11,905 (D)

Income less expenses (A - D) £10,445 (E)
Annual Investment Allowance £0 (F)
Profit chargeable to tax (E - F) £10,445 (G)

Class 4 NI threshold £5,715 (H)
Amount for Class 4 NI (G - H) £4,730 (I)
Class 4 NI @ 8% (I x 8%) = £378 (J)

Other income £0 (K)
Personal Allowance £6,475 (L)
Amount for basic rate tax (G + K - L) £3,970 (M)
Basic rate tax (M x 20%) £794 (N)

Total tax and NI for 2010/11 (J + M) £1,172 (O)
Amount paid to date £0 (P)

Amount due for 2010/11 (O - P) £1,172 (Q)

First payment on account for 2011/12 (If Q is over £1,000, Q/2) £586 (R)
Second payment on account for 2011/12 (If Q is over £1,000, Q/2) £586 (S)

The online tax return does it all for you, and deals with the exceptions where the above simplified calculation doesn't work (e.g. income from savings accounts, shares etc.)

[Jelly Baby]

Thankyou so much managed to get it finally done last night and paid! Big relief, now to get sorted for the 2011 one!
Thanks also for everyone elses replys and help.

[happyfeet]

I'm having a nightmare with mine too.

I've put in my total earned minus my expenses and my wear and tear and annual allowances. I haven't come across the box for personal allowance.
I followed the advice above to not put that with expenses and leave it til they end but then i come to a page that says I need to pay £849 class 4 NI by end jan 12.

Where do you enter your personal allowance?????

[MrAnchovy]

Where do you enter your personal allowance?????

You don't have to - HMRC already know what it is and take it into account in the calculation.

Are you sure it doesn't say £849 Income Tax and Class 4 NI? Is the taxable profit less allowances about £9,290? If so, I am afraid that is what it is.

[happyfeet]

It does say Tax and NI class 4!!!:phew:

Didn't notice the word 'tax'

Saw the word NI class 4 and the amount and thought that was without my tax!!!:eek:

Just found a pile of receipts that I had put to one side (how did I miss those???) that I haven't added in yet so hopefully it will come down a little bit!!

[MrAnchovy]

Just found a pile of receipts that I had put to one side (how did I miss those???) that I haven't added in yet so hopefully it will come down a little bit!!

That's good - for every £10 of allowable receipts you will save £2.80 :)