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Post Info TOPIC: Self employment profit below the personal allowance.
claireb


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Self employment profit below the personal allowance.
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Afternoon all,

 

Good to read up on a few posts over last few weeks having not had chance to get on here for a few months. (I blame children!)

 

Just wondering, If a client's profit (in his first year of self employment) doesnt reach the Personal allowance, will he get a refund from the HMRC? if he has asked them not to collect it thru next years tax code, what happens to the 'unreached' personal allowance?

E.G profit 6500, personal allowance 8105

 

Many thanks

 

C

 

 

 



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Shamus


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Sorry, a refund of what?

He's made £6500, no tax payable.

In that scenario £1605 of the personal allowance is wasted.

The personal allowance is only a notional figure, it is not a guarantee that everyone working will earn that amount.

See also this thread where a similar question was asked :

www.book-keepers.org.uk/t55270278/mileage-claim-clarification/

Personal allowances must be used in the year and they are utilised before (or in effect simultaneous to) any carry forwards / carry back loss so be careful when playing around with losses that you do not waste the personal allowance.

kind regards,

Shaun.


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Shaun

Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
claireb


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Most helpful thanks Shaun.

The personal allowance is not carried forward then... what a shame!

Many thanks





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Cheshire


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Hi Claire
Its is a shame and I only wish the personal allowance was carried forward - I didnt work for a while as I took redundancy and then set up my own business last year - I only got the one personal allowance to play with, but thats life! As Shaun says - its only a notional figure.



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 Joanne 

Winner of Bookkeeper of the Year 2015, 2016 & 2017 

Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.

You should check out answers with reference to the legal position
FoxAccountancyServices


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Hi Claire

It might not be relevant to your case, but just as an addition... you wouldn't bother claiming capital allowances if the un-adjusted profits weren't covering your PA, you would wait until a year when a profit was made.

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claireb


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Thanks for all you comments.

Yes what a shame its not carried forward because next year will be a totally def story to him.
He will still get a refund this yr because he was CIS

Not relevant to me Michelle thanks - Ill leave that sort of stuff to the accountant.

Thanks for you help - I often get the odd question thrown at me that I cant answer until I see an accountant I work closely with - and having you all is a massive bonus.

Thanks





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