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Post Info TOPIC: Personal Allowance
Lisa68


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Personal Allowance
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Good Afternoon,

I am studying for my self assessment qualification and have a friend who is self employed and after doing his own self assessment didn't need to use any of his personal allowance as his net income was below £6475, he has informed me that if you don't use up any or only part of your personal allowance you can actually carry it over to your next years tax return to add it to your p.a of that year to reduce the tax due if required, i'm not so sure this is correct can anyone clarify this please.

Lisa


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semsley


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No it i not correct. The personal allowance is currently 6475 for a year - over that you pay tax, under it you don't but may have to pay 8% NI if net income over 5175. You cannot carry any underspend to the following year. Use it or lose it!!!

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Ben V


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You cannot carry forward unused personal allowance. It's "use it or lose it".

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Ben V
Lisa68


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Thank you for your replies, I didn't think so, but he was actually told this by an accountant.

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semsley


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He may have been confused - you can carry losses forward to the following day if you make a loss but not personal allowance.

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Ben V


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We're trained to answer every 10th question wrong, it keeps the clients on their toes biggrin

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Ben V
gbm


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Ben, shush, don't give all our secrets out!

Back to the question, could it have been losses, either from sole trader or company?

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cheapaccounting


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Lisa68 wrote:

Thank you for your replies, I didn't think so, but he was actually told this by an accountant.



sounds like Chinese Whispers advice biggrinbiggrin

 



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Peasie


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Ben V wrote:

We're trained to answer every 10th question wrong, it keeps the clients on their toes biggrin

Is that every 10th question a client asks or every 10th question?

Imagine how annoying it would be if one particular client happened to be the unlucky one that managed by fluke to ask the 10th question every time.


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