Frequently Asked Questions: General  
   
  1. I think I have paid too much tax, what can I do?
  2. I'm a full time student, why am I paying tax?
  3. What do I do when I go Self-employed?
  4. What expenses can I claim when I am self-employed?
  5. Which Tax Office deals with my Income Tax affairs?
  6. I suspect someone of evading tax, what can I do?
  7. Why does the tax year start on April 6?

1. I think I have paid too much tax, what can I do?

If you are self-employed on Self Assessment:

We open a tax account for everyone who gets a Tax Return and send out statements.
If your Statement of Account shows you are due a refund

  • we will repay it if you have asked us to (you can do this on your Tax Return)
  • we will credit it to your account, if you are not asking us to repay it.


If you are an employee on PAYE:

  • If I have to pay additional tax on emergency code, when will I get it back?
    Your employer will normally pay it back to you on the next pay day after you get your proper code. If the tax year ends before you get your proper code, the Tax Office will send you the repayment.
  • What should I do if I leave my job?
    It is important to get a form P45 from your employer. If you don't go to another job and don't start claiming unemployment benefit, you may be entitled to a tax repayment. After a month, ask for a repayment claim form P50 which you should complete and return to your Tax Office with your P45 Parts 2 and 3 if you have them. We give repayment claims top priority and try to make sure you get any refund you are due within 28 days.
  • What happens if I think I have paid the wrong amount of tax?
    Contact your Tax Office to ask them to check the amount you have paid is correct. If you have paid too much tax, the Tax Office will send you a repayment

If you are a saver paying tax on your bank or building society interest:

Some savers may be able to claim back from the Inland Revenue all the tax deducted from their interest, because they are not due to pay any tax. Other savers may be able to claim back some of the tax deducted, because the amount taken off their interest is more than they are due to pay.

2. I'm a full time student, why am I paying tax?

All individuals regardless of their age are liable to pay Income Tax if their income exceeds their personal allowance

If you only work during the three holiday periods (Christmas, Easter and Summer) and you estimate that your total income for the tax year will be less than the personal allowance, ask your employer for a form P38(S). Return the completed form to your employer to enable your wages to be paid without deduction of Income Tax.

Completion of this form is not applicable if you are working during term time (e.g. evenings or weekends).

3. What do I do when I go self-employed?

It is important that you notify the Inland Revenue and HM Customs and Excise when you start self-employment. You can notify both departments using just one form: CWF1, which asks for some basic information about your business. You should keep complete records of all your business income and expenditure so that they can be used to calculate your taxable profit at the end of your accounting period. The records should be kept in case the Inspector asks to see them.

Visit our Starting up in Business pages for comprehensive advice and the form CWF1. You can also register by calling the Helpline for the Newly Self-Employed on 08459 15 45 15.

4. What expenses can I claim when I am self-employed?

Expenditure can be split into two main categories, 'Capital' and 'Revenue'.

Capital Expenditure

Capital expenditure is expenditure on such items as the purchase or alteration of business premises, purchase of plant, machinery, and vehicles, or the initial cost of tools.

You cannot deduct 'Capital expenditure' in working out your taxable profits, but some relief may be due on this type of expenditure in the form of Capital Allowances. Your Tax Office can give further advice on these allowances.

Revenue Expenditure

It is impossible to list all the expenses that can be deducted but, generally speaking, allowable expenditure relates to day to day running costs of your business. It includes such items as wages, rent, lighting and heating of business premises, running costs of vehicles used in the business, purchase of goods for resale and the cost of replacing tools used in the business.

Examples of non allowable expenditure are your own wages, premiums on personal insurance policies, income tax and National Insurance contributions.

Where expenditure relates to both business and private use, only the part that relates to the business will be allowed, examples are lighting, heating, and telephone expenditure. If a vehicle is used for both business and private purposes then the capital allowances and the total running expenses will be split in proportion to the business and private mileage. You will need to keep records of your total mileage and the number of miles travelled on business to calculate the correct split.

5. Which Tax Office deals with my Income Tax affairs?

If you are self employed you will be dealt with by a Tax Office locally. Employed persons and persons receiving pensions from former employers are dealt with by the Tax Office dealing with the employer's Head Office. Your local Tax Office will be able to tell you which Tax Office deals with your affairs, or, if you are employed, your employer will also know.

6. I suspect someone of evading tax, what can I do?

Any suspicion can be reported in confidence to any local Tax Office.

Alternatively, you can call our Anti-fraud Helpline on 0800 788887.

It is open Monday to Friday 8:30am to 5pm

7. Why does the tax year start on April 6?

The reason for the tax year running from 6 April to 5 April is primarily historical and has its origin in the switch from the Julian to the Gregorian calendar in 1752.

It had been calculated in the 16th Century that the Julian calendar had lost 9 days since its introduction in 46 BC. Most of Europe changed to the new, more accurate, Gregorian calendar in 1582, but this country continued with the old one until September 1752 by which time the error had increased to 11 days.

These 11 days were 'caught up' by being removed from the calendar altogether - 2 September was followed by 14 September. In order not to lose 11 days' tax revenue in that tax year, though, the authorities decided to tack the missing days on at the end, which meant moving the beginning of the tax year from the 25 March, Lady Day, (which since the Middle Ages has been regarded as the beginning of the legal year) to 6 April.

The dates were adopted for income tax on its re-imposition in 1842 and have not changed since.

 
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