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Sam
Sam, Accountant
Category: UK Tax
Satisfied Customers: 12790
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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Hi I need to know if my tax is calculated correctly

Resolved Question:

Hi Sam,


 


Last year I was self employed after being employed under PAYE


 


I have been told by my accountant that I earned £64000 last year as a self employed surveyor


 


I was using my own car and travelled approx 25000 miles to get to surveys across the region I worked in.


 


I also had to buy tools and lunches etc cant give exact amounts as she has all my receipts but esimated values of tools are £800 and lunch etc approx £7 per day moblle phones cost me £30 per month also had to spend £2500 on a car and sold the old car at a loss paid £1500 in 2009 sold it for £450 last year, would this qualify for tax relief along with the newer car purchase.


 


I believe you can claim for using a part of your home as an office and also I had to do a lot of printing with the associated consumables and buy a new printer I have just been told my tax bill will be approx £13800 is that correct ? As I have no way of knowing what calculations to apply 

Submitted: 8 months ago.
Category: UK Tax
Expert:  Sam replied 8 months ago.

Hi

 

Thanks for your question and asking for me.

 

Your accountant should provide you with an income and expenditure sheet detailing the amounts AND also a copy of the tax/Class 4 Calculation and a copy of the submitted tax return for 2013.

 

With the car there are two ways of calculating the allowable deduction but whatever method you have to remain with it until you change the car (which you did in the relevant tax year but I shall use the mileage method

 

So I work things as follows

Travel 25,000 miles first 10,000 miles at 45p = £4500

Millage in excess of 10,000 are 15,000 miles at 25p = £3750

With the mileage method you not claim for the car sale and purchase, but can do if you claimed travel under the actual method (so would have added all the running costs together, and then established the business and total mileage, to establish the business use percentage AND allowed the purchase costs of the new vehicle and added back in what you sold the old vehicle for) so I would need more information to take this forward.

Total £8285

Tools £800

Mobile phone (assuming all business) £30 x 12 = £360

Lunches are not allowable as we all have to eat to live.(unless you had overnight accommodation for any job, then evening meal the night before and breakfast the next morning are permitted as well as the overnight hotel/B&B charge)

Home as an office (if this not exclusively used as an office) £3 a week x 52 = £156

If used only as an office then would need the heating and lighting bills and the amount of habitable rooms (excluding bathroom and kitchen)

Then the paper and ink costs and the printer are allowable and I shall estimate a figure of £500

Accountancy costs £1000 estimated

 

So Income £64000

Total expenses (based on above) £11,101

Net Income £52,899

 

Tax

£52,899 less £8105 = £44,794

First £34370 x 20% = £6874

Remaining £10424 x 40% = £4146.60

Total tax due £11,020.60

 

Class 4 National Insurance

Net Income £52899 less £7605 = £45,294

First 34870 x 9% = £3138.30

Remaining £10424 x 1% = £104.24

Total National Insurance due £3242.54

 

Total tax and Class 4 National Insurance bill for 2012/2013 = £14263,14

If your total bill is for £13800 this would suggest that your accountant has possibly allowed the actual method for travel expenses along with the car purchase and that you did supply the heating and lighting bills (if you have a room set aside just for business)

But this seems about right!

 

But chase up for the full breakdown of how figures were calculated - so you can be sure yourself, all has been claimed right AND make sure lunches are NOT claimed.

.

Thanks


Sam

 

 

Sam, Accountant
Category: UK Tax
Satisfied Customers: 12790
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
Sam and 4 other UK Tax Specialists are ready to help you
Customer: replied 8 months ago.

Hi Sam


 


Many thanks for a quick and concise answer

Expert:  Sam replied 8 months ago.

Hi

 

You are very welcome - at least then it gives you some pointers how expenses are claimed. And what your accountant SHOULD provide you with (as I provide this, and a full explanation) to all my clients !

 

Thanks

 

Sam

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