Self assessment - self employment low income

[didds]

Moderator Message:
Moved to Taxes and title amended. I cannot open the post for editing though.

For some while Ive had a very samll secondary income via seom self employment .. a but of local IT work, some sports coaching, some jourbnalism. These amounted to just a few K every year, and were declared on my SA along with my main income.

Time moves on and that secondary self employment is down to just a few hundred pounds a year at most - below the 1K limit on a SA for declaration. I dont see this changing for the forseeable future (over a decade).

My SA is as i understand only needed because I had a > 1K self employment plus over adecaede ago I was a director of a ltd compamny. that too has gone. Im now just a wage slave - with this minimal self employment.

Im just about to fill in my SA. Can I now <however) cancel/drop my self employment as it will now never breach the (current) 1K level for declaration?
This would mainly mean hopefully I wont need to bother with a SA ever again.

Or doesnt it work that way and now im "inside the SA system" Im lumbered with it for ever even when im a pensioner with no emplotyment at all?

didds

[PinkDalek]

I know you love DAK Didds but I may reply if you get the topic moved to Taxes practical (once I've got the time and have fathomed out what you are saying - yes I know your issues but I also know you can use preview when needed and can spell etc).

[tjh290633]

I usually end up with a small loss, due to doing a lot of voluntary work, so I always complete the return, but I suspect that, if you wish to stop trading, as it were, a note to that effect in your return would do the job.

TJH

[PinkDalek]

... but I suspect that, if you wish to stop trading, as it were, a note to that effect in your return would do the job.

He hasn't ceased to trade and cannot therefore truthfully complete the equivalent of Box 6 here:

https://assets.publishing.service.gov.u ... h_Form.pdf

If your business ceased before 6 April 2020, enter the final date of trading DD MM YYYY

Notes on Tax Returns, if that is what you meant, as against box filling, are rarely read.

Might look in more detail later but I'd favour a phone call (make a note) to put them on notice and see what they say.

[JonE]

... now im "inside the SA system" Im lumbered with it for ever even when im a pensioner with no emplotyment at all?

A few weeks ago I used the checker at https://www.gov.uk/check-if-you-need-tax-return to confirm my understanding of the situation and then followed their link to https://www.tax.service.gov.uk/forms/fo ... sessed/new (login required to Govt Gateway).

I've now received confirmation that returns and notices to file for 2018/19 and 2019/20 have been withdrawn (with cancellation of late-filing penalties arising from my non-resident return being lost in the post) and I don't expect to receive any 'notice to file' in future.

Cheers!

[supremetwo]

I usually end up with a small loss, due to doing a lot of voluntary work, so I always complete the return, but I suspect that, if you wish to stop trading, as it were, a note to that effect in your return would do the job.TJH

Is that off-settable against any other income one might have or just carried forward for the particular self-employment?

[bluedonkey]

I usually end up with a small loss, due to doing a lot of voluntary work, so I always complete the return, but I suspect that, if you wish to stop trading, as it were, a note to that effect in your return would do the job.TJH

Is that off-settable against any other income one might have or just carried forward for the particular self-employment?

The general rule is that trading losses can be set off against all income of the same or previous tax year; or carried forward against future profits of the same trade.

[tjh290633]

I usually end up with a small loss, due to doing a lot of voluntary work, so I always complete the return, but I suspect that, if you wish to stop trading, as it were, a note to that effect in your return would do the job.TJH

Is that off-settable against any other income one might have or just carried forward for the particular self-employment?

The general rule is that trading losses can be set off against all income of the same or previous tax year; or carried forward against future profits of the same trade.

I can confirm that. There is a box to check to ensure that it happens.

TJH

[didds]

Thanks all - FWIW I used the website linked to above an it says i no longer need to fill in a SA, includingfor 2019/20 so Ive used the other weblink to ask to cancelmy SA registration. though that page says id still ahve to do one for 2019/20 which which is somewhat contrary!

june 22nd I shall know...

didds

[bluedonkey]

Thanks all - FWIW I used the website linked to above an it says i no longer need to fill in a SA, includingfor 2019/20 so Ive used the other weblink to ask to cancelmy SA registration. though that page says id still ahve to do one for 2019/20 which which is somewhat contrary!

june 22nd I shall know...

didds

There is a difference between (a)notifying the end of your self employment and (b)cancelling your self assessment registration. I would generally suggest not doing (b). Organisations often ask for your UTR.

[didds]

[There is a difference between (a)notifying the end of your self employment and (b)cancelling your self assessment registration. I would generally suggest not doing (b). Organisations often ask for your UTR.

Do they?

I've filled in SA since they first ever started.

the only "people" I have EVER had to provide a UTR to is... err... HMRC.

Q: if they never ever had to fill in a SA what do people who are asked for a UTR by these orgainsations respond with ? Given these people dont have a UTR ?

didds

[PinkDalek]

I usually end up with a small loss, due to doing a lot of voluntary work, so I always complete the return, ...

Is that off-settable against any other income one might have or just carried forward for the particular self-employment?

The general rule is that trading losses can be set off against all income of the same or previous tax year; or carried forward against future profits of the same trade.

In case TJH or others need to note the restrictions.

Relief against income or capital gains: restrictions

Restrictions may apply for claims to use losses against income or capital gains. Some restrictions deny relief. Others limit the amount of loss you can use.

Do not make any of these claims if you:

...
do not run your trade commercially and for profit, for example if your trade is run as a hobby
...
The amount of loss relief you claim against income or capital gains may be restricted or limited for example if you:

worked for less than 10 hours a week on average on commercial activities of the trade

Extracted (partially) from: https://www.gov.uk/government/publications/losses-hs227-self-assessment-helpsheet/hs227-losses-2020

Additionally, for larger trading losses:

There’s a limit on the total amount of Income Tax reliefs that you may claim for deduction from total income for a tax year. Loss relief is one of the reliefs affected. The limit is the higher of £50,000 and 25% of the adjusted total income of the year. See Helpsheet 204 if you think you may be affected by this.