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SELF ASSESSMENT

SELF ASSESSMENT. ORDER OF PRESENTATION:. WHAT IS SELF ASSESSMENT (SA). WHO ARE REQUIRED TO FILL OUT SA FORM. IMPORTANT DATES. BASIC INFORMATION CASE STUDY – TOM JONES JONES HARDWARE MULTIPLE CHOICE QUESTIONS?. SELF ASSESSMENT SYSTEM! . SYSTEM INTRODUCED IN TAX YR 1996/97.

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SELF ASSESSMENT

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  1. SELF ASSESSMENT

  2. ORDER OF PRESENTATION: • WHAT IS SELF ASSESSMENT (SA). • WHO ARE REQUIRED TO FILL OUT SA FORM. • IMPORTANT DATES. • BASIC INFORMATION • CASE STUDY – TOM JONES • JONES HARDWARE • MULTIPLE CHOICE QUESTIONS?

  3. SELF ASSESSMENT SYSTEM! • SYSTEM INTRODUCED IN TAX YR 1996/97. • SYSTEM WHEREBY THE TAX PAYER ACCOUNTS FOR INCOME EITHER PARTIALLY TAX/NOT TAXED AT SOURCE. • TAX PAYER LEGALLY RESPONSIBLE FOR SA RETURN.

  4. WHO ARE REQUIRED TO FILL OUT SA FORM? • INDIVUDUAL RECEIVING INCOME NOT TAXED AT SOURCE. FOR E.G. • BUSINESS INCOME – SOLE TRADER/PARTNERSHIP. • HIGHER RATE TAXPAYER. • ALL DIRECTORS OF COMPANIES.

  5. IMPORTANT DATES – SURROUNDING SA. • TAX YEAR – 6TH APRIL TO 5TH APRIL. E.G. TAX YR 2009/10. 6TH APRIL 2009 TO 5TH APRIL 2010. ISSUE OF SA RETURNS: • END OF APRIL FOLLOWING TAX YR. • COMMENCEMENT OF TRADE – NOTIFY WITHIN 3 MTHS OF END OF 1ST MONTH TRADE START UP.

  6. IMPORTANT DATES – SURROUNDING SA. • REGISTRATION FOR SA – SA1 (REGISTRATION FORM) • HMRC WILL SEND – UTR NUMBER. • ALTERNATIVE – FILE SA ON LINE OR RECEIVE PAPER BASED TAX RETURN.

  7. FILING DATES: • PAPER RETURN – FILE BY 31ST OCTOBER FOLLOWING TAX YR. • FILE ON LINE – FILE BY 31ST JAN FOLLOWING THE TAX YEAR. • E.G. TAX YEAR 2008/09 – FILE DATE ON 31ST JAN 2010.

  8. TIME LINE FOR TAX. TAX YR 08/09 6TH APRIL 2008 5TH APRIL 2009 31 ST OCT 2009 31ST JAN 2010

  9. PAYMENT DATES: • Paying your tax • ‘YOU MUST PAY ANY AMOUNT DUE FOR 2008-09 BY 31 JANUARY 2010. THIS PAYMENT DEADLINE IS THE SAME WHETHER YOU'VE FILED ON PAPER OR FILE ONLINE’. (TAKEN FROM HMRC)

  10. PENALTIES: FIXED PENALTIES: • THE INITIAL PENALTY IS £100 IF THE RETURN IS NOT FILED BY THE DUE DATE. • A DAILY PENALTY CAN BE IMPOSED OF £60 PER DAY. TAX GEARED PENALTIES: • IF THE RETURN HAS NOT BEEN FILED OVER 12 MONTHS OF ITS DUE DATE THEN A TAX GEARED PENALTY MAY BE IMPOSED.

  11. BASIC TAX INFORMATION: PERSONAL ALLOWANCE • £6035 (IF YOU DON’T USE YOU LOSE IT) INCOME SOURCES • EMPLOYMENT INCOME. • RENTAL INCOME • TRADING INCOME • INVESTMENT INCOME CLASSIFICATION • OTHER INCOME (EMPLOYMENT, RENTAL, TRADING ). • SAVINGS INCOME – (BANK,BUILDING SOCIETY INTEREST)

  12. BASIC TAX INFORMATION:ORDER OF TAXATION:

  13. BASIC INFORMATION – INCOME TAX RATES. INCOME TAX RATES & TAXABLE BANDS -2008/09 BASIC RATE: 20% £0 - £34800 HIGHER RATE: 40% OVER £34800 (APPLIES TO OTHER INCOME & SAVINGS INCOME) DIVIDENDS - BASIC RATE 10% DIVIDENDS - HIGHER RATE 32.5%

  14. BASIC INFORMATION – NATIONAL INSURANCE CONTRIBUTIONS. CLASS 2 AND CLASS 4: CLASS 2 - £2.30 PER WEEK. CLASS 4 – BASED ON TRADE PROFITS. LOWER PROFIT LIMIT £5,435 UPPER PROFIT LIMIT £40,040 ABOVE UPPER PROFIT LIMIT 8% 1%

  15. USEFUL INFORMATION FOR THE PREPARATION OF ACCOUNTS YOUR BASIC RECORDS WILL NORMALLY INCLUDE: • A RECORD OF ALL YOUR SALES, WITH COPIES OF ANY INVOICES YOU'VE ISSUED • A RECORD OF ALL YOUR BUSINESS PURCHASES AND EXPENSES • INVOICES FOR ALL YOUR BUSINESS PURCHASES AND EXPENSES, UNLESS THEY'RE FOR VERY SMALL AMOUNTS • DETAILS OF ANY AMOUNTS YOU PERSONALLY PAY INTO OR TAKE FROM THE BUSINESS • COPIES OF BUSINESS BANK STATEMENTS

  16. CASE STUDY – TOM JONES. FACTS: • EMPLOYED • HIGHER RATE TAXPAYER • INCOME NOT TAXED AT SOURCE – RENTAL. • WIFE VOLUNTARILY UNEMPLOYED.

  17. CASE STUDY 2. FACTS: • SELF EMPLOYED. • BUSINESS 3 YRS OLD. • LOSSES MADE IN YR 1 AND YR 2. • LOSS RELIEF IN OPENING YEARS.

  18. MULTIPLE CHOICE QUESTIONS: • 1 – WHO IS RESPONSIBLE FOR SA RETURN? • HMRC • THE TAX PAYER • THE TAX PAYER’S EMPLOYER • 2 – WHEN DOES THE ONLINE SA RETURN HAVE TO BE FILED FOR TAX YR 2008/09? • 28TH FEBRUARY 2009 • 31ST JANUARY 2010 • 31ST JULY 2009

  19. MULTIPLE CHOICE QUESTIONS: 3. WHAT IS THE INITIAL PENALTY FOR MISSING THE DUE DATE FOR FILING? • £150 • £250 • £100 4.TAX YR 2008/09 – WHEN DOES IT START AND END. • 6/4/2008 TO 31/3/2009 • 5/4/2008 TO 6/4/2009 • 6/4/2008 TO 5/4/2009

  20. MULTIPLE CHOICE QUESTIONS: 5. ORDER OF TAXATION ON INCOME SOURCES. • OTHER INCOME, DIVIDEND INCOME, SAVINGS INCOME. • DIVIDEND INCOME, OTHER INCOME, SAVINGS INCOME. • OTHER INCOME, SAVINGS INCOME, DIVIDEND INCOME

  21. THE END.

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