This is applicable to people who trade as self-employed or if you have a business from which you earn dividends, which are therefore required to file a Self-Assessment tax return. If your tax bill is more than £1,000 for a tax year, then the HMRC will ask you to make advance tax payments, which will go towards your Self-Assessment tax bill for the following tax year.

The advance payments need to be paid in two instalments: the first 50% needs to be paid by 31 January following the end of the tax year and the second 50% needs to be paid by the end of the following July.

A P45 is a certificate that you receive when you leave your job during the tax year. It is issued if you pay tax and national insurance through the PAYE or payroll system. The P45 will reflect who your employer was, your gross salary earned and the amount of tax you paid to HMRC while you worked for your employer. A P45 is only issued when you leave employment and should not be confused with a P60 which shows your gross salary and tax paid for the entire tax year.

Yes. Individuals receive tax relief on donations made to charities registered in the UK and in other EU member states. If you are a higher rate or additional rate taxpayer, you can claim the difference between the rate you pay and the basic rate on your donation. You can do this either when you submit your Self-Assessment Tax Return or by asking HMRC to amend your tax code.

A National Insurance number is your unique number that ensures that all your National Insurance contributions and taxes are recorded against your name only. It's made up of letters and numbers and never changes. You will usually find your National Insurance number on your payslip, P60, P45 or any other letters about your tax, pensions, or benefits.

If you have not filed a Self-Assessment tax return before and HMRC has not already issued you with a tax return to complete, then you can follow this link to apply for a Unique tax reference number:
https://www.gov.uk/log-in-file-self-assessment-tax-return/register-if-youre-not-self-employed

The marriage allowance was introduced to take effect from the tax year 2015/16. It allows certain individuals who are married or in a civil partnership to elect to transfer some of their personal allowance to their spouse or civil partner.

The election will be relevant to those couples where one of the spouses either has insufficient income to utilize his or her personal allowance; or has income which is taxed at 0%, for example where it falls wholly within the starting rate band for saving income. Anyone who will be eligible can transfer 10% of their personal allowances.

In the UK, every person who gets paid under the PAYE scheme is allocated a tax code by HMRC. This is usually in the form of a number followed by a letter suffix, though other 'non-standard' codes are also used. This code will be used by HMRC to tell employers how much tax they need to deduct from an employee’s salary.

It really all depends on how long it takes you to get all the information together, but most clients complete the questionnaire and upload the necessary documents within 20 minutes. We always try and process your information within a couple of days, although this can take longer over busy periods. We are however committed to reviewing and uploading a tax calculation within two weeks after we have all the information.

Firstly, Tax Dashboard makes it easy and simple for you to file your tax return and secondly, and probably more importantly, with the help of Tax Dashboard, you know that your tax return is filed accurately, knowing you have included what is required to be included and claim what you are able to claim.

Tax Dashboard cannot change the tax rules. So, you can’t claim for more things through Tax Dashboard than you otherwise could, but with Tax Dashboard we make sure that you know of all the allowances and deductions that you are legally entitled to.

Tax Dashboard is all about providing an excellent service. The site is there to make it easier for you to understand what is required, but we are very big on providing a great personal service. So, we are happy to discuss or talk you through the calculation over the phone should you wish.

If you are self-employed, renting out properties or if you have a business then you are legally required to keep all records for 7 years.

HMRC will automatically check the information that you submitted on your tax return with the information they hold on their system like Gross Salary earned and tax deducted from your salary. If they pick up any discrepancies, then they will write to you.

Many people don’t feel comfortable dealing with HMRC directly, so when HMRC writes to them they prefer to use the help of a professional to deal with the enquiry on their behalf. This can be quite expensive, so the key is to always make sure you file your tax return correctly to ensure that you have nothing to worry about if HMRC checks your tax return.

Don’t claim charitable giving under gift aid as a deduction.
Don’t claim higher tax relief on pension contributions.
Submitting incorrect figures, salary, and tax paid.
Don’t include P11d details.
Omit to declare interest income earned and also don’t include the tax already deducted from interest earned.
Omit any capital gains made on assets sold.
Forget to include income earned in other countries.
Claim business expenses that are clearly not business related or not an allowable deductible business expense according to HMRC e.g. like claiming general clothing wear as a business expense.
Don’t use actual amounts, but try to guess income and expenses.

If you have a lot of outstanding Self-Assessment tax returns and you don’t know how or where to start completing them, then Tax Dashboard can help you do this. You can easily select each relevant tax year that you want to submit, complete the questions relating to that year and by following this process you can provide all the necessary information to get each year sorted and submitted with the help of Tax Dashboard.

You may normally only submit three years’ worth of late tax returns. For example, in the tax year 2017-18 (i.e., from 6 April 2017 to 5 April 2018) you may submit returns for 2016/17, and three late returns – 2013/14, 2014/15 and 2015/16. If HMRC issued you with tax returns for the 12/13 tax year, you will not be able to submit this online, but you will have to post this via postal service to HMRC.

Yes, you can appeal late filing penalties if you have a ‘reasonable excuse’ for filing late. You will however first need to file the outstanding tax return before you can appeal the penalty. For a successful appeal against a penalty, you will need to tell HMRC your reasonable excuse and then assure them that it was a one-off and that it will not happen again.

The paper return, online assistance and jargon used by HMRC can all add to the confusion of the Self-Assessment return. It’s understandable why many turn to accountants and tax experts. Applicable allowances and tax breaks are hidden under a cloud of confusion too, and in most instances, you need to be a tax expert to unravel what you are allowed.

Tax Dashboard was built to make all this easier for you, to help explain what is needed from you in plain and simple English and to consider everything that you potentially can claim as expenses and allowances. Tax Dashboard is the tax friend you wish you always had. It takes the time to explain things in simple terms to you and keep an eye out for you, making sure you don’t lose out on any tax breaks.

Yes, if you have questions about tax planning or would like to speak to an accountant about what you can do better to structure your affairs more tax efficiently, then please feel free to give us a call to arrange a time to speak to one of our accountants.

Gift Aid is an income tax relief designed to benefit charities and Community Amateur Sports Clubs (CASCs). If you’re a UK taxpayer, Gift Aid increases the value of your charity donations by 25%, because the charity can reclaim the basic rate of tax on your gift – at no extra cost to you.

Money laundering is the process whereby criminals legitimise (or wash) illegally obtained money to hide its true nature or source (typically the drug trade or terrorist activities). Money laundering is affected by passing it surreptitiously through legitimate business channels by means of bank deposits, investments, or transfers from one place (or person) to another.

Under the Proceeds of Crime Act (POCA) 2002, accountants are legally obliged to know their clients and to submit a suspicious activity report (SAR) to the National Crime Agency if they feel there is any reason to suspect that money laundering or terrorist financing is taking place. Failure to do so means that as well as facing criminal sanctions, they risk providing a gateway for ill-gotten gains into the legitimate economy.

Yes, you can file your self-assessment tax return yourself directly via HMRC if you feel comfortable that you understand how it all works, but when you file your self-assessment tax return via Tax Dashboard, then you have the peace of mind that a qualified accountant reviewed your information and that your tax return is completely correct and accurate.

Property allowance can be claimed by anyone who receives income from land and property. You can get up to £1,000 each year as a tax exemption on your property income received during the tax year. If the total of all your property income is less than £1,000 for the tax year, then you will not pay any tax on your property income - please note that this allowance cannot create a tax loss. If your property income is more than £1,000 then you can choose to either claim the £1,000 property allowance or you can claim actual expenses (the latter is recommended if actual expenses are more than £1,000). It is very important to note that if you claim the property allowance you cannot also claim other expenses like home office, mileage, etc.

Firstly, it is important to remember that you only pay tax on your taxable self-employed profit, which will be all your self-employed income earned during the tax year, less all business expenses incurred = taxable profit (The tax due is then calculated on this amount).

Secondly, it is important to note that there are different tax brackets for National Insurance and Normal Tax. National Insurance Contributions (NICs) are contributions which pays for certain benefits including State Pension and Universal Credit etc.

The thresholds and self-employed tax calculations are as follow for the 19/20 tax year (this is for the period 06 April 2019 till 05 April 2020).

Let’s first look at how National Insurance contributions are calculated:

Class 2 National Insurance threshold: £6,365 - You will pay a one-off £156 per year if your taxable profit exceeds this threshold.

Class 4 National Insurance threshold: £8,632 – you will pay 9% tax on all your taxable profit between £8,632 and £50,000 and 2% on all your taxable profit exceeding the £50,000 threshold.

To summarise the National Insurance payable:

• no National Insurance is due when your total taxable self-employed income is less then £6,365 for the year
• you will pay one-off £156 per year if your taxable profit is more than £6,365 per year
• you will pay 9% on taxable profits between £8,632 and £50,000
• and you will pay 2% (reduced from 9% to 2%) on all taxable profit exceeding the £50,000 threshold

The income tax thresholds work as follow:

• no income tax is due when your total taxable profit is less than £12,500 for the year
• income tax of 20% is payable on all taxable income between £12,500 and £50,000 (Basic Rate Band)
• income tax of 40% (increase from 20%) is payable on all taxable income between £50,000 and £150,000 (Higher Rate Band)
• income tax of 45% is payable on all your taxable profit that exceeds £150,000 per year (Additional Rate Band)
• if you earn over £100,000, your tax-free Personal Allowance of £12,500 is reduced by £1 for every £2 of taxable income over £100,000. So, if you are earning £125,000 or more the tax-free personal allowance is nil.

So, let’s look at a few examples:
Assumptions to note with these examples:

• The taxpayers are only earning self-employed income, so no other income e.g., rental income or other salary income etc.
• These calculations are based on the thresholds for the 19/20 tax year. The threshold changes each tax year, so please have a look on HMRC website for detail of Normal Tax and National Insurance thresholds for previous tax years
• These calculations only show how to calculate the tax due.
• Please have a look at FAQs to see how and when you need to pay tax due or to find out how payments on account is calculated (advance payments).

The calculations will also be different if you have reached state pension age:
(please see HMRC website to calculate state pension age)

• You will no longer be liable to pay class 2 National Insurance when you reach the state pension age
• If your self-employed profits exceed the lower earnings limit for class 4 (£8,632), you will pay class 4 National Insurance in the tax year in which you reach state pension age (as class 4 is based on profits for a tax year), but not for the following year.

Example 1:

David is self-employed, and he earned £8,000 self-employed income and he incurred £2,000 in business expenses (which wholly, exclusively, and necessarily relate to costs incurred to generate this income) during the tax year.

David’s tax calculation will look as follow for the 19/20 tax year:

Self-employed income:              £8,000

Less business expenses:          (£2,000)

Taxable profit:                             £6,000

David will not be liable to pay tax for the 19/20 tax year:
Class 2 NI: Taxable profit is less than £6,365, therefore nothing is due
Class 4 NI: Taxable profit is less than £8,632, therefore nothing is due
Income tax: Taxable profit is less than the personal allowance of £12,500, therefore nothing is due

Example 2:

Sandy is self-employed, and she earned £10,000 self-employed income and she incurred £2,000 business expenses (which wholly, exclusively, and necessarily relates to costs incurred to generate this income) during the tax year.

Sandy’s tax calculation will look as follow for the 19/20 tax year:

Self-employed income:              £10,000

Less business expenses:          (£2,000)

Taxable profit:                             £8,000

Sandy will be liable to pay tax of £156 for the 19/20 tax year:
Class 2 NI: Taxable profit is more than £6,365, therefore £156 is due
Class 4 NI: Taxable profit is less than £8,632, therefore nothing is due
Income tax: Taxable profit is less than the personal allowance of £12,500, therefore nothing is due

Example 3:

Mark is self-employed, and he earned £12,000 self-employed income and he incurred £2,000 in business expenses (which wholly, exclusively, and necessarily relates to costs incurred to generate this income) during the tax year.

Mark’s tax calculation will look as follow for the 19/20 tax year:

Self-employed income:              £12,000

Less business expenses:          (£2,000)

Taxable profit:                             £10,000

Mark will be liable to pay tax of £279.12 for the 19/20 tax year:
Class 2 NI: Taxable profit is more than £6,365, therefore £156 is due
Class 4 NI: Taxable profit is more than £8,632, therefore £123.12 is due which is 9% on £1,368 (£10,000 less £8,632)
Income tax: Taxable profit is less than the personal allowance of £12,500, therefore nothing due

Example 4:

Emma is self-employed, and she earned £18,000 self-employed income and she incurred £3,000 in business expenses (which wholly, exclusively, and necessarily relate to costs incurred to generate this income) during the tax year.

Emma’s tax calculation will look as follow for the 19/20 tax year:

Self-employed income:               £18,000

Less business expenses:          (£3,000)

Taxable profit:                             £15,000

Emma will be liable to pay tax of £1,229.12 for the 19/20 tax year:
Class 2 NI: Taxable profit is more than £6,365, therefore £156 is due
Class 4 NI: Taxable profit is more than £8,632, therefore £573.12 is due which is 9% of £6,368 (£15,000 less £8,632)
Income tax: Taxable profit is more than the personal allowance of £12,500, therefore £500 is due which is 20% of £2,500 (£15,000 less £12,500)

Example 5:

Pete is self-employed, and he earned £60,000 self-employed income and he incurred £5,000 in business expenses (which wholly, exclusively, and necessarily relate to costs incurred to generate this income) during the tax year.

Pete’s tax calculation will look as follow for the 19/20 tax year:

Self-employed income:              £60,000

Less business expenses:          (£5,000)

Taxable profit:                             £55,000

Pete will be liable to pay tax of £13,479.12 for the 19/20 tax year:
National Insurance:
Class 2 NI: Taxable profit is more than £6,365, therefore £156 is due
Class 4 NI: Taxable profit is more than £8,632, therefore £3,723.12 is due which is 9% of £41,368 (£50,000 less £8,632, so 9% x £41,368 = £3,723.12)
And 2% is due on taxable profit exceeding the £50,000 threshold, therefore £100 is due which is 2% of £5,000 (£55,000 less £50,000)

Income tax:
Basic Rate Band: Taxable profit is more than the personal allowance of £12,500, therefore £7,500 is due which is 20% of £37,500 (£50,000 less £12,500 = £37,500).
Higher Rate Band: 40% is due on taxable profit exceeding the £50,000 threshold, therefore £2,000 is due which is 40% of £5,000 (£55,000 less £50,000 = £5,000)