Hello all,
A quick query regarding my Tax calculation. Any help from moderators/gurus/experts especially with an accountancy background will be much appreciated.
I made “X” amount of money from salary and “Y” amount of money from self-employment in my claiming period. Income from both sources combined, I could meet the threshold required for my Tier-1 General visa and my visa was approved. For salaried Income the Tax was deducted at source and they used up my Personal Allowance [Tax free income].My question is: When declaring income to the HMRC wouldn’t it be right if you just declare the income from self-employment [“Y”] and pay the taxes on that amount as the tax on income from salary has already been deducted at the source ? I would assume I would not be able to use up my Personal Allowance [Tax free income] as it has already been used up by the employers. Is this correct?
The reason I ask this question is because I have spoken to a few accountants & I`m getting different advice from each of them. Some say I should add both- (1) income from salary and (2) self-employment within the given tax year [April-April], deduct Personal Allowance [Tax free income] and pay the taxes on that. The others advise that I need to declare income only from self-employment and pay taxes on those without deducting the Personal Allowance [Tax free income].The best, or rather the worst bit is a part of the salaried income [almost 50%] does not even fall within the claiming period and adding it to my net income is doing nothing but increasing my tax as taxes above a particular threshold increase from 20% to 40%. I could save a few thousand pounds if I do the later and I would prefer to do that but I would rather do the right thing at this stage.
I would please request any advice from experts/gurus. Thanks a lot for this in advance.
Kind Regards,
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