Curam Answers Your Most Frequently Asked Questions About Tax Returns

We know firsthand that sometimes, tax can feel taxing. We're here to ensure our community of self-employed carers have all the information at their fingertips to complete their tax return with confidence which is why we've compiled a comprehensive list of answers to our most commonly asked tax questions. 

What is a tax year?

The tax year is the period of time whereby the business trades and pays taxes on the profits. For self assessment, this is 6th April to 5th April so for instance 6th April, 2022 to 5th April, 2023.

Limited companies specify their own tax years although these are handled differently to sole trader businesses.

What are the tax deadlines?

Tax returns have to be submitted online by 31st January each year and all tax due is to be paid by then unless you enter into a time to pay arrangement with HMRC.

What if I haven't done any self employed work in the last year?

Usually you won’t have to complete a tax return however, if you registered as self employed within the tax year you may have to along with some other circumstances if you were not self employed. HMRC will inform you if you need to complete a tax return and if you are unsure, log onto your personal tax account via the government gateway and read your messages.

What do I do if I've lost my gateway login details?

When you log in there will be an option to recover your account.

What if I can't pay my tax bill? 

HMRC will generally consider a time to pay arrangement where the tax bill is spread throughout the year. You will need your income and expenditure figures for this. Search HMRC time to pay or follow the links in your self assessment.

How do payments on account work and are they negotiable? 

Payments on account are payments based on last years tax bill and paid in effect to sit on account to cover the following years tax bill. You can ask them to not be considered but for this you would usually have to convince them that your business has reduced over the current tax year and therefore your tax bill will not be too high. If you do manage to reduce your payments on account however, make sure you bear this in mind as it is harder to convince them to reduce them a second year.

How much do I have to earn to have to submit a tax return?

Tax returns are governed by the status of your employment rather than the amount you earn. However if your revenue is less than £1,000 you can claim the tax free allowance. You have to select to use this in your tax return and you will not be able to put through any other expenses. If you select that you have sales of less than £1,000 follow the instructions on the return.

How do I keep track of self employed tax and PAYE if juggling the two? 

The PAYE is notified to you on the payslip from your employer or your P60. Generally you will have a tax allowance of £12570 which means you can earn that amount without paying tax. Your tax code is on your payslip and this will inform you of that amount. Anything over that in the lower threshold will be taxed at 20%. When you do your self assessment return it is clearly separated and you complete the figures separately.

I have been paying NINo and Tax in my savings on a self assessment account. To budget for my tax and nino- will I be able to pay directly from my budgets?

Will probably need more information, feel free to email me at michael@firstcallhospitality.co.uk.  If you use traditional accounting and buy a vehicle for your business, you can claim this as a capital allowance. If I use cash basis accounting and I bought my car and mobile phone for my care business, can I claim these (car and phone) as a capital allowance? What if I want to use simplified expenses? Or should I have it as allowable expenses

If I have limited company can I do the tax return myself? And I saw rent there if I work from home can I put part of rent as cost

You may qualify as a micro business in which case you can do your own accounts although they are different to a self assessment return. In terms of rent, yes you can, these are simplified expenses. If you want to contact me about these, please feel free.

What about sickness payments? 

Unfortunately you cannot claim for sickness if you are self employed however some insurance companies offer this in their business insurance.

What about if they have two self employed roles

If you are a sole trader, you can enter them separately in the tax return, it will ask you for the names of the businesses. You can also combine the figures if you wish.

What if I'm a limited company? 

You would need to file your accounts depending whether you are a micro business. Also consider that your tax year may be different to the tax year for self assessment.