Hi, I am self employed, so I keep record of all my invoices for paying tax on my Self Assessment. However, I did some work for an University which was paid to me detracting taxes on source. Meaning I received already the net income (20% less). How can I include this invoice in my QuickFile books for record, without having been charged tax again when I file my Self Assessment? Can I simply record my invoice as paid in full and then mark the difference as ‘Purchase/Expense’? Thanks
When you say “detracting taxes on source” do you mean they treated you as a “worker” and paid you through PAYE? If that’s how they did it then you don’t record that income in QuickFile at all, it would be a separate “employment” page on your SA return. If it wasn’t PAYE then you’ll probably need to talk to your accountant about the best way to proceed.
Yes they paid me as PAYE. I know I shouldn’t technically add this to my SA, however I would like to keep track of it in my books so I can see how much I earned that year in total. So it’s not possible to have it in Quickfile without that affecting my income tax?
Not really, no. They paid you (as an individual) through PAYE, they did not pay your business, and QuickFile should only show your self-employed business income.
There was at one stage a feature request for the tax summary report to add the option to list other non-business income so it can get a more accurate estimate of your tax liability, but I’m not sure if that ever got implemented.
Record the invoice total on the Quick File accounting system rather than the net figure. The tax reduction of 20% is to be credited against the “tax deduction at source” rather than being treated as an expense. The total earnings are reported in the UK self-assessment tax return form.