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Where Taxpayers and Advisers Meet

child benefit/marriage allowance and self employed tax return

IslandMan
Posts:6
Joined:Sat Apr 01, 2017 11:55 am
child benefit/marriage allowance and self employed tax return

Postby IslandMan » Sun Apr 30, 2017 10:02 am

First time im filling in a online line self assessment for being self employed
I earned a total of 56 k in the last tax year with around 7 k of business expenses making my total taxable allowance 49 k, will i still have to pay some of my child benefit back ie is it based on the total annual earning or the taxable earnings?

Further to this I had marriage allowance added on to my personal allowance as I was earning less in previous years, will this be stopped from the next tax year and will i also have to pay some money back now? Marriage allowance is stopped when the earning partner earns over 45k . Again is the 45 k for after or before expenses? It would appear that next year I may be best off capping my earning at 45k.

Anyone been through this before / have any ideas?
Help appreciated

D&C
Posts:61
Joined:Thu Dec 22, 2016 10:04 pm

Re: child benefit/marriage allowance and self employed tax return

Postby D&C » Sun Apr 30, 2017 5:01 pm

Child Benefit isn't based on either turnover or profit but adjusted net income - see gov.uk explanation at https://www.gov.uk/guidance/adjusted-net-income

You seem to be getting your tax years mixed up as far as Marriage Allowance is concerned, also income isn't a factor for this it's whether you are a higher rate taxpayer or not. For 2016/17 the standard limit was £43000 but things can alter this, notably pension tax relief and gift aid payments, so not always the cut off for Marriage Allowance.

For 2017/18 the basic rate limit remains £43000 for Scottish taxpayers and is increased to £45000 if you live outside Scotland.

If you have received Marriage Allowance for 2016/17 when none is due then your self assessment tax liability will reflect this and if you are higher rate payer then yes it will be stopped for later years as well (although if you don't turn out to be a higher rate payer in 2017/18 your spouse could always make a new application to give her allowance to you for 2017/18).

One thing of concern about your post is that you appear to have had a tax code which included the Marriage Allowance I had marriage allowance added on to my personal allowance as I was earning less in previous years but you don't mention any PAYE income - if you had a job for part of 2016/17 before (or alongside) your self employment then you have to include that on your tax return as well. Along with all the other usual suspects, interest, dividends etc if any received during the year


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