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Carers UK Forum • Self employed, carers allowence and tax return
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Self employed, carers allowence and tax return

Posted: Mon Jan 20, 2020 10:53 am
by Marie_1407
Hi, this is all new to me so please bear with. I get carers allowence and became self employed in Dec 19. I earn the amount you can to still qualify for carers & I got paid at the end of Dec for my work for the first time. Do I need to submit a tax return by the end of Jan 2020 as I only started in Dec 19? Thank you, hope that makes sense.

Re: Self employed, carers allowence and tax return

Posted: Mon Jan 20, 2020 10:57 am
by Chris From The Gulag
Do I need to submit a tax return by the end of Jan 2020 as I only started in Dec 19 ?


A question best asked of the TaxMan ... HM Revenue and Customs ?

Let me have a look :

https://www.gov.uk/self-assessment-tax-returns

Self Assessment tax returns.

Contents :

Overview.

Who must send a tax return.

Registering and sending a return.

Deadlines.

Penalties.

If you need to change your return.

How to get help.

Returns for someone who has died.


Yep ... that link seems to fit the bill ?

If on irregular earnings , could be problems ahead IF income is NOT averaged over a period ... especially so under Universal Credit.

If in any doubt , contact the Carers Unit at the DWP :

General enquiries

Telephone: 0800 731 0297.

Textphone: 0800 731 0317.

NGT text relay (if you cannot hear or speak on the phone): 18001 then 0800 731 0297

Monday to Friday, 8am to 6pm

Carers Allowance Unit
Mail Handling Site A
Wolverhampton
WV98 2AB


If under Universal Credit , through your online journal ?

And , of course ... TAPERS :

https://www.carersuk.org/forum/support- ... eril-39587

Re: Self employed, carers allowence and tax return

Posted: Mon Jan 20, 2020 1:15 pm
by bowlingbun
I ran a small business for many years. So many people starting a business don't understand how important the financial records are, how to write them, and most of all, how the taxman calculates income for tax purposes.

Are you familiar with the way your income is worked out? Here is a very over simplified guide.

Your income is what you are PAID for the work you have done LESS the expenses you incurred to do that work.
That's not just the cost of the materials you used, but also an element of heat, light, transport etc. HMRC do a good guide on this subject.

For example you might sew a dress, the fabric cost £30 and the thread £5, that's a total of £35.
Your are paid £50 for the dress.
Your GROSS income may be £50, but from that figure you take away the costs of the materials £35.
That gives a gross profit of £15 to cover all your labour etc.

However, you then have to consider all the other things involved.
Producing that dress would involve heat and light in your sewing room, the cost of your desk, chair, iron, ironing board etc. scissors, pins, the dress pattern etc. etc. etc. You can't charge all these costs to one garment, but calculate them on an annual basis for the tax man. Divide it by 52 for a weekly cost.
Realistically, that dress will have cost at least £40 to produce.
If you charged £50 for the dress, your "income after expenditure" would only be £10!!

Re: Self employed, carers allowence and tax return

Posted: Tue Jan 21, 2020 12:51 am
by Niki
The tax returns that people are currently panicking about are for the 2018-19 tax year. It sounds as though what you're talking about is the 2019-20 tax year, which you don't need to start dealing with until after April this year, surely?

But you do need to inform HMRC within 3 months of going self-employed, otherwise you might get fined.

Re: Self employed, carers allowence and tax return

Posted: Tue Jan 21, 2020 3:44 am
by bowlingbun
HMRC and DWP can access each others systems.
If you know how income is calculated by HMRC, you then know the information DWP need.
They want it on a monthly basis though.
I always did my books monthly, so much easier in any case.

Re: Self employed, carers allowence and tax return

Posted: Tue Jan 21, 2020 8:06 am
by Chris From The Gulag
I always did my books monthly, so much easier in any case.


Hence my reference to " Irregular earnings " and " Averaging " ... and eventually , both under UC
... and then throw in " Tapers. "

Nowadays , a working knowledge of the benefits system is vital if one is also claiming benefits.

Even more so , timing ... especially if income comes in irregular lumps ... both for potential tax
liabilities , and for juggling purposes under UC.

Interesting times ahead ?

( May NOT be needed now but the basics of being self employed under UC : https://www.gov.uk/self-employment-and-universal-credit )

Re: Self employed, carers allowence and tax return

Posted: Tue Jan 21, 2020 3:03 pm
by WhizzyWoo1954
Hello Marie,
If you only commenced Self-employment on the 19th December 2019, you will only need to complete self employed profits on a Self Assessment tax return for the year from 6th April 2019 to 5th April 2020. ie the 2019/20 tax year. These will not be issued until after 5th April 2020. You will have up until the end of January 2021 to file it.

However you do have to inform HMRC of your self-employment within 3 months of starting it. Don't delay as there is a possibility of being fined if you are late doing it.

Another point to consider is that because you are claiming Carer's Allowance you will need to prove that you are earning below the threshold of £123 per week (this may have altered now, I'm not sure of the current threshold).

Until 12 months ago I was self-employed and claiming Carer's Allowance. Approximately every 6 months the department responsible for Carer's Allowance sent me a form to complete to show that that my earnings were below the threshold.

Keep accurate records of money coming in and money going out for the business. Keep receipts for all business expenditure. If you issue invoices for the money you receive keep those as well or whatever paperwork you receive. Keep copies of the bank statements.

It helps to have two files, one for money coming in and one for money going out. Get a small exercise book and use it as a cash book. Money in one side and money out on the other. Make sure you date everything accurately and have two columns for each - one for cash and one for bank.

Keep the records religiously - write them up at least once a week. It is surprising how soon things can be forgotten.

Re: Self employed, carers allowence and tax return

Posted: Tue Jan 21, 2020 3:11 pm
by Chris From The Gulag
Another point to consider is that because you are claiming Carer's Allowance you will need to prove that you are earning below the threshold of £123 per week (this may have altered now, I'm not sure of the current threshold).


Especially be wary here IF income comes in lumps ... warnings already posted earlier in this thread.

When it comes to deductible expenses , check ... and check again ... that they qualify for DWP purposes.

Re: Self employed, carers allowence and tax return

Posted: Tue Jan 28, 2020 2:18 pm
by Marie_1407
WhizzyWoo1954 wrote:
Tue Jan 21, 2020 3:03 pm
Hello Marie,
If you only commenced Self-employment on the 19th December 2019, you will only need to complete self employed profits on a Self Assessment tax return for the year from 6th April 2019 to 5th April 2020. ie the 2019/20 tax year. These will not be issued until after 5th April 2020. You will have up until the end of January 2021 to file it.

However you do have to inform HMRC of your self-employment within 3 months of starting it. Don't delay as there is a possibility of being fined if you are late doing it.

Another point to consider is that because you are claiming Carer's Allowance you will need to prove that you are earning below the threshold of £123 per week (this may have altered now, I'm not sure of the current threshold).

Until 12 months ago I was self-employed and claiming Carer's Allowance. Approximately every 6 months the department responsible for Carer's Allowance sent me a form to complete to show that that my earnings were below the threshold.

Keep accurate records of money coming in and money going out for the business. Keep receipts for all business expenditure. If you issue invoices for the money you receive keep those as well or whatever paperwork you receive. Keep copies of the bank statements.

It helps to have two files, one for money coming in and one for money going out. Get a small exercise book and use it as a cash book. Money in one side and money out on the other. Make sure you date everything accurately and have two columns for each - one for cash and one for bank.

Keep the records religiously - write them up at least once a week. It is surprising how soon things can be forgotten.
Thank you. I have told them that I have started SE today. My money is going in regularly in one payment on the same day of each month which shows up on my bank statement. I will keep these and I have started a notebook to record my monthly earnings and what CA I get too. These will be my records. I hope that will be ok. Thanks for your help.

Re: Self employed, carers allowence and tax return

Posted: Tue Jan 28, 2020 3:42 pm
by Marie_1407
Just a quick question if carers is a taxable income should I have said I have more than one source of income? ie I work for more than one person? Thank you.