Help please - PAYE coding notice - effect on tax return
I hope someone can point me in the right direction here. I have a client who is both employed under PAYE (higher tax payer) and from 2014/15 onwards also self-employed in a partnership (basic sole-trader type set up).
The partnership made a loss of £7k in first year of which 50% is attributed to my client. Therefore I was pretty much expecting there to be no tax owing for my client for 14/15.
However, the tax liability for the year is £885.
The client has since provided me with a copy of a PAYE coding notice for 14/15 which increased his personal allowance by £2,038 for the tax year. The notes on the PAYE notice state this is to do with 'employment expenses'.
The client has stated he hasn't incurred any employment related expenses in 14/15. The only thing I've had to enter is some private medical care £419 from his P11D.
Effectively then the tax liability amount is the tax on the £2,038 relief my client has (incorrectly?) received via PAYE in 14/15.
Now this is where I'm confused. Should I be entering the £2,038 on the tax return under 'employment expenses' or am I correct in ignoring it completely?
I'm due to speak with my client about this tomorrow lunchtime and just want to be certain before advising.
Any help much appreciated.
The partnership made a loss of £7k in first year of which 50% is attributed to my client. Therefore I was pretty much expecting there to be no tax owing for my client for 14/15.
However, the tax liability for the year is £885.
The client has since provided me with a copy of a PAYE coding notice for 14/15 which increased his personal allowance by £2,038 for the tax year. The notes on the PAYE notice state this is to do with 'employment expenses'.
The client has stated he hasn't incurred any employment related expenses in 14/15. The only thing I've had to enter is some private medical care £419 from his P11D.
Effectively then the tax liability amount is the tax on the £2,038 relief my client has (incorrectly?) received via PAYE in 14/15.
Now this is where I'm confused. Should I be entering the £2,038 on the tax return under 'employment expenses' or am I correct in ignoring it completely?
I'm due to speak with my client about this tomorrow lunchtime and just want to be certain before advising.
Any help much appreciated.
0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 318 NEW! Qualifications 2022
- 161 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 87 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership