May, 2010

Tax Returns for Childminders

So you have decided to work as a self-employed childminder! Congratulations. You are now your own boss. This does mean, however, that you will have to be responsible for keeping your own records and paying your own taxes. This article will provide you with a great place to start, offering you a few more places to learn about paying your taxes as a self-employed person, as well as providing you with some helpful hints and tips to get you started. When you have read it, feel free to contact us for more information (using the link near the end of this post) or check out some of the other articles on the site.

First of all, and most importantly, you need to let Her Majesty’s Revenue and Customs (HMRC) know that you are newly self employed as soon as you start to earn money. You can do this either by completing form CWF1 (included in booklet P/SE/1, or found here) or by telephoning the “Newly Self-Employed Helpline” on 0845 915 4515. If you fail to register as self-employed within 3 months (starting from the last day of the month in which you began to earn money through self-employment) you may be liable for a £100 penalty – so make sure you stay on top of it! Once you have registered, you will be expected to pay Class 2 national insurance contributions at a flat rate, regardless of how much you are earning (unless you are annually earning less than the Small Earnings Exception, which at the time of writing is £5,075). If you are earning quite a lot of money, you may need to pay more than the class 2 contribution, so it is worth seeing what HMRC have to say at (http://www.hmrc.gov.uk/rates/nic.htm).

In any case, once you have registered as self-employed, you will be expected to start keeping records of your business dealings. These can be summarised as records of all the money entering and leaving your business, including any money you spend on the children you are taking care of (which you may be able to claim as a business expense and receive tax relief for. For help with keeping records, you may like to use the resources available at the National Child-minders Association website – especially the specially designed book at http://shop.ncma.org.uk/registered-childminders-accounts-book-590-0.html, which will help you to keep records of your business dealings.

If you have kept records for the whole financial year, and have made sure you know what sort of expenses you can claim tax relief on, then filling out your tax return shouldn’t be too much trouble. If you are worried about doing it wrong though, or if you would simply prefer it to be completed professionally, you can apply for some expert help by clicking the “apply now” button at the end of this post!

Any more questions? Send us a message, we are happy to help. Alternatively, why not apply for some expert help with your tax return?

apply for a tax rebate

Disclaimer: The above information can not be taken as advice and is for illustration purposes only. Please call Tax Fix before making any claims or confirmation. Tax Fix can not accept any liability for action taken and any losses incurred.

Self Employed Tax Return Expenses

What self-employment offers in excitement, freedom and adventure is balanced out by the mind-bending tediousness of filling out a tax return! It has to be done though, and as soon as you start making money while working for yourself, you need to register as self-employed with the tax office. And, if you fail to get your tax return in on time at the end of each financial year, you may be forced to pay a penalty. For details of these penalties, why not read “Self Assessment Tax Penalties” here. On the bright side, it is likely that you will be able to claim a certain amount of tax-free business-related expense every year, which may save you a substantial amount of money in tax.

Here’s how it works. You can claim tax relief for a lot of different business spending and, although the system of what is and is not allowed is rather complex, it means that business owners can get support in the most important areas of their work. For example, the system as it stands at the moment allows you to receive tax relief on purchases of:

  • The tools of your trade, including cars, vans, tools, etc. (and also computers);
  • Improvements in the Workplace – that is, putting up shelves and so on;
  • New premises (sometimes – check the more detailed rules about this);
  • Fuel expenses;
  • Utility expenses…

…amongst other things!

So if you run a business, and you think you may be able to claim expenses on any of the things above (or anything else), you simply need to include all of the information about your business expenses on your next tax return. You may need to start holding on to your receipts, but it will be well worth it when you receive a tax rebate! All of the information about your expenses can be included in the self-employment pages of your tax return.

The information you have to collect about your business in order to complete your tax return should contain records of any time money passed into or out of the business, and it needs to be stored for 5 years. If you are not already keeping all the necessary records for your business, you may also want to take a look at the advice here:

For more details about tax relief and expenses, you can check out the official HMRC site. From here, you can link to all kinds of more specific information that you may find useful.

Any more questions? We are happy to help. Alternatively, why not apply for some expert help with your tax return?

Self Employed
Tax Returns – £99

apply for a tax rebate

Disclaimer: The above information can not be taken as advice and is for illustration purposes only. Please call Tax Fix before making any claims or confirmation. Tax Fix can not accept any liability for action taken and any losses incurred.

Self Assessment Tax Penalties

Self-employed people in the UK always have to complete a tax return. If you have been self-employed for more than three months (after which time you are expected to have registered as self employed with your tax office) you will be expected to have found out exactly what measures you need to take in order to pay your tax. Also, you may have to complete a tax return for a number of other reasons. If you receive income from a source other than your regular employment, or if you have lived abroad at all, you may be expected to fill in a tax return. Also, ministers (of any faith) and names/members of Lloyd’s are expected to complete a return. In fact, the long and the short of it is that everyone needs to double check the complexity of their tax situation, to make sure they are paying the right tax – or else run the risk of facing self assessment tax penalties.

Indeed, if a tax return is filed late there is currently an automatic £100 fee to be paid. A late tax return is excusable for only a few reasons, and is taken very seriously by Her Majesty’s Revenue and Customs. On their website they have a detailed list of reasonable excuses (for which they may waive the self assessment tax penalties).

Among the extenuating circumstances are:

  • Documents being irretrievably lost through theft, fire, or flood;
  • Life-threatening illnesses;
  • Postal strikes;
  • The death of a business partner – although you may need to prove that you intended to get your tax return in on time before this happened;
  • Problems with the HMRC online filing service (if you can prove that you had no other option but to file online).

Obviously, if you have not paid enough tax you will be expected to pay the appropriate charges associated with your miscalculation as well!

All of the information you need, to ensure that you are not penalised for completing your tax return late or incorrectly (or even not at all) is easily found through HMRC. A good place to start is their official website, which can be found at (this is a link to one of the pages on their site that deals specifically with the penalties you may face if you do not declare your income in the proper way).

Good luck in managing your tax this financial year, and remember to check with HMRC regularly (at least once a year, before you fill in your tax return) to make sure you are aware of any recent changes to the law. The key to avoiding self assessment tax penalties is to stay informed.

Any more questions? Send us a message, we are happy to help. Alternatively, why not apply for some expert help with your tax return?

apply for a tax rebate

Disclaimer: The above information can not be taken as advice and is for illustration purposes only. Please call Tax Fix before making any claims or confirmation. Tax Fix can not accept any liability for action taken and any losses incurred.

Non UK National Tax Refund

Non UK national tax  rebate

Every year over £300 million goes unclaimed in tax refunds from the Inland Revenue. If you are a Non UK national working in Britian, you may be able to claim a tax rebate. We answer some of the most common questions on this subject, if you can not see the answer you are looking for, please do not hesitate to contact us:

I am a Non UK national working in England. Can I claim a tax rebate?
As a Non UK national there are a number of reasons why you might be due a tax rebate. For example:

If you think you might be due a tax refund you can call free on 0800 955 2829 to discuss your situation further.

How can I calculate my tax rebate?
Every April, when the tax year finishes, you should be given a P60. Alternatively when you finish working for your employer, they should provide you with a P45.

Simply take the ‘Gross pay’ figure from the P45 or P60 and type this number into our tax rebate calculator . Do the same for the ‘total tax paid’ and then press on ‘Calculate’. The tax calculator will give you an estimate of the tax refund you will be due.

What if I do not have a P60?
If you do not have a P60 or P45 you can still check and claim a tax rebate from the UK government. You need to ask your employer for a statement of earnings on company headed paper. This will show how much you have earned and how much you have paid in tax and it is a sufficient replacement for a P60 or P45. If you like, we can get a maximum of two copies for you if you would like us to claim your tax rebate on your behalf.

How many years can I claim a tax rebate for?
You can claim for a maximum of 6 years. So if you worked in the UK any time in the last 6 years you can still make a claim.

How do I apply for my Non UK national tax refund?
You can either make a claim yourself or you can use a tax refund agent. A tax refund agent can obtain all the information required on your behalf. If however if you are claiming the refund yourself, you will need:

  • Any P45’s
  • Any P60’s
  • A P91 – Employment History form
  • P85/P86 – Leaving/Entering the UK forms
  • Covering Letter

If you have any other questions, watch the short explainer video below or alternatively ask a question in the comments and we’ll personally answer it:

 

 

Non UK Resident Tax Refund

Non UK resident tax  refund

If you are a non UK resident and have paid tax while working in the UK there is a good chance that you can make a claim for a tax refund. This article highlights some of the most common questions around the subject. If you were unable to find the question you were looking for, please Email our team:

I’m leaving the UK to become a non resident, can I claim a tax refund?
Yes. If, before leaving the UK, you have worked and paid tax you will be able to claim a tax refund as you are leaving the UK part way through the tax year. You can make a claim by applying here.

I’m a non resident working in the UK, can I claim a tax refund?
If will depend on your situation but if you have paid income tax to the UK government you can make a claim when you leave the UK for a refund on a proportion of that amount. You can make a claim by applying here.

How do I calculate my non resident tax rebate?
If you have worked in the UK you should have been given a P45 when you stopped working. The P45 will show how much you earned and how much you paid in tax during the year. Take these two amounts and input them into tax rebate calculator.

Is there a time limit on claiming a tax rebate?
There is a 6 year time limit on your tax refund. If you fail to claim your tax refund before then it will expire.

Can I claim a National Insurance rebate as a non resident?
No. You must be a resident in the UK to make a claim for a national insurance rebate.

Guide: UK Tax Refund Requirements

student tax exmeption UK

If you have worked in the UK, there are a number of reasons why you could be due a tax refund. This article outlines some of the reasons and requirements for claiming a tax refund in the UK. If you have any further questions please send us an E-mail:

How do I know if I am eligible to apply for a tax rebate?
There are a number of reasons why you could be eligible for a tax rebate. The most common reasons are:

What are the requirements for claiming a tax rebate?
If you think that you might be due a tax rebate, there are a number of documents that you will need in order to make your claim with the Inland Revenue:

  • Any P45/P60’s
  • A P91 – Employment History form
  • P85/P86 – Leaving/Entering the UK forms
  • Covering Letter
  • Form P38(S) – Inland Revenue Student Tax Exemption Form (only required if you are a student)

Once you have all the applicable documents listed above, send them to your local tax office. If you do not want to make the claim yourself, a tax rebate agent such as TaxFix will obtain all the information required on your behalf and submit your claim to the Inland Revenue.

What are the requirements for claiming a national insurance rebate?
If you are working and are a UK resident, you can claim a portion of your national insurance contributions back. To learn more: National Insurance rebates.

Claim a Tax Refund

Disclaimer: The above information can not be taken as advice and is for illustration purposes only. Please call Tax Fix before making any claims or confirmation. Tax Fix can not accept any liability for action taken and any losses incurred.

How a Student can Reclaim Tax

reclaim tax back if you work while a student

The number of people going to university and working whilst a student has increased over recent years. Our tax specialist answers some of the most common questions on the subject. If you don’t find an answer to your question below, please send us an E-mail:

I am a student in the UK. Can I claim a tax rebate?
Almost all students who work can claim a tax refund. If you live and work in the UK, you are given a tax free allowance. In the 2009/2010 tax year this was £6,475. Your tax free allowance is usually drip fed into your pay cheque throughout the year, so that you get part of the allowance in each pay packet. If, as a, student you earn below £6,475 or are only working during the summer or at Christmas, it is highly likely that you will not have been given your entire tax free allowance and therefore you will be eligible to claim a tax refund.

Often people think that just because they are a student they can claim a tax refund; this is incorrect. Only those students who earn less than the tax free allowance can claim all their tax back. They are not eligible simply because they are a student.

Can I claim back all the tax deducted from my student job?
If you earn below the tax free allowance (£6,475 in the 2009/2010 tax year) then you will be able to claim back all the tax that you have paid. If you have earned more, you will still be able to make a claim but it is unlikely you will be able to claim all your tax back.

How do I know how much my student tax refund will be?
When you stop working for your employer you should be given a P45. Alternatively, at the end of the tax year you should be given a P60. These documents will tell you how much you have paid in tax and how much you have earned. Put these totals into our tax refund calculator and it will calculate your tax refund due.

My employer did not give me a P60/P45. Can I still claim my student tax back?
Yes. Ask your employer for a ‘statement of earnings’. They are required by law to give you this if you ask for it. A statement of earnings is a sufficient replacement for a P60 or P45 for HMRC.

I am an International Student. Can I claim a tax refund?
Yes international students and domestic students are both eligible to make a claim for a tax refund if they have worked in the UK.

I was a student more than 4 years ago, is it too late to claim?
No. You can make a claim for up to 6 years in arrears. If you worked as a student anytime in the last 6 years, now is the time to make a claim, before it is too late.

How do I claim my student tax back?
There are two ways to make a claim. You can make a claim yourself or you can use a tax agent to help you. If you are making your tax refund claim yourself, you will need:

You will need to send the above documents to your tax office. A tax refund agent will obtain all the information required on your behalf and will submit your claim to the Inland Revenue and secure your refund for you.

Can I claim a National Insurance refund if I am a student?
If you are a student living in the UK you can claim a National Insurance refund.

 

Tax Return for UK Rental Property


With house prices decreasing, more and more people are choosing to rent their properties until the market picks up. We have compiled a list of some of the most common questions about renting your property and tax returns:

Do I have to do a tax return if I am renting property?
If your profit from rental property is over £2,500 in the tax year, you will need to complete a tax return. If the rental income is below £2,500 and you are employed, you can contact your local tax office to adjust your PAYE tax code and you will not need to complete a tax return.

What are allowable expenses for renting a property
If you rent a property you can reduce your tax liability by offsetting any allowable expenses. These could include:

  • letting agent’s, and lawyers/legal fees
  • building and contents insurance costs
  • loan interest
  • maintenance and repairs -improvement costs are not allowed
  • rent, ground rent and property service charges
  • Council Tax
  • advertising your property to rent
  • other costs such as phone calls

How do I group my rental property expenses?
If your income for property rental is below £15,000 a year before any expenses, you can group them all as a single total on your tax return. If your expenses are above £15,000 you will need to group them separately and complete the full tax return.

How long do I need to keep my rental property records for?
Make sure that you keep any records relating to your rental property tax return for 6 years after the tax year for which it was due, whether you completed a tax return or not.


Petrol Tax Relief on Car Mileage


Petrol Tax Relief on Car  Mileage

Not everyone knows that if they use their car, van, motorbike or even their cycle for work they can often claim a tax relief on the mileage. We answer some common questions on this subject. If you do not find the question you are looking for, Send us a message

What qualifies for business mileage tax relief?
If you use your own vehicle you can claim for business mileage on any travel that you do as part of your job. Temporary work places qualify but it does not include:

How do I calculate my business mileage tax relief?
You can calculate your mileage tax relief by multipyling the number of miles you have traveled by the approved mileage rate for your vehicle.

Step By Step

1. Find the total of your business mileage in the tax year

2. Multiply this by your approved vehcicle mileage rate.

3. Add up the mileage allowance given to you by your employer, if any at all.

4. Subtract the amount your employer gave you from the amount calculate in step 2.

Let’s look at an example. During the year you use your car for 850 miles for business. As part of your employment contract your employer pays you 30p per mile . Your business mileage multiplied by your vehicle rate is £340 (850 times 40p). Your employer gives you an allowance of £255 (850 times 30p). Therefore you can make a petrol tax claim for £85 (£340 less £255).

What records do I need to keep?
You should keep as much information as you can including the dates/time that you travelled as well as the journey mileage for each work related journey. Make sure that you keep these records for at least 6 years.

How do I claim my petrol tax relief ?
You can claim your tax relief by completing a tax return. We offer a no obligation service and only charge a fee if you are due a tax rebate on your mileage.

How far back can I claim petrol tax relief for?
You can claim as far back as 6 years for a tax relief on any mileage that you have done.

Any more questions? Send us a message, we are happy to help.


Inland Revenue Tax Returns for Property Owners


Renting one or more properties is treated by the Inland Revenue as a business for tax purposes. If you rent more then one property you can offset losses from one against another. We answer some common questions about being and landlord and completing a tax return on your rental income:

What are residential lettings?
Any property you rent out for other people to live in is classified as a ‘residential letting’. There is a difference for tax purposes between ‘residential lettings’ and holiday lettings.

If you rent a room in your house this could also be classified as residential lettings, but you can take advantage of the Inland Revenue’s ‘Rent-a-room’ scheme, which allows you to recieve up to £4,250 tax free.

Do I need to complete a tax return if I rent a property?
If you make over £2,500 a year from your rental property, you will need to complete a tax return. If you total income for your property is over £15,000 in the tax year you must declare it on the land and property pages of your Self Assessment tax return.

How much tax will I pay on my rental property?
Any expenses that you incur when renting your property will be taken off the income you recieve from it. The remainder is profit and this will be added to your other income and taxed at your tax rate.

What expenses are allowable for renting a property?
If you have any residential lettings you can reduce your tax liability by offsetting any allowable expenses against your rental income. These expesnes could include:

  • letting agent’s, and lawyers/legal fees
  • building and contents insurance
  • mortgage/loan interest for your property
  • maintenance and repairs -improvement costs are not allowed
  • rent, ground rent and property service charges
  • Council Tax
  • advertising your property to rent
  • other costs, such as phone calls

How long do I need to keep my expense information for?
You need to keep any records relating to your rental property for 6 years, whether you completed a tax return or not.