Is this tax right?!

[Advice]

Hi all, any advice on the below appreciated.

I worked as a self employed contractor until March 2020. I then ceased trading and started full time employment. Its been that way since.

The LTD could not be closed down as I had outstanding corp tax to pay. Still paying that.

The final returns were due from 20-21 this past Jan.
I pay monthly instalments on the final corporation tax (ongoing to March 23) and paid off the final personal tax return.

I've heard from my accountant. I need to file again for last year (21-22) as some dividend distribution fell into that period.

Also being asked to declare the income from my full time job on my personal return the last two years.

How have I found myself in a position whereby I pay tax thru my full time position while also having to declare that same salary as personal income under a self employed status?

It seem I am being taxed twice.... frustrating as I haven't worked as a self employed contractor in two years and am still paying tax as a self employed person.

Is there anything I can do here?

Many thanks!

[Fred Bloggs]

You cannot be taxed twice on the same employment income. There's something not right if you think you are.

By the way, as a limited company officer, you are not self employed. You understand that, right?

[WTFH]

What was your tax code for the years 20/21, 21/22 and 22/23?

[Bodger]

Also being asked to declare the income from my full time job on my personal return the last two years.

How have I found myself in a position whereby I pay tax thru my full time position while also having to declare that same salary as personal income under a self employed status?

This is normal. You put your employed income and taxes paid. This then informs your personal allowances for the dividend income. You won't be taxed for it twice, as you've already paid the tax as an employee.

[Lance]

- If you run (ran) a LTD. then you were not self-employed. Am important difference when it comes to tax
- From April 2021 you FTE job will have been taxed at source so don't worry about that other than to make sure it's on your self-assessment tax return
- Declaring your personal income that you have already paid tax on is fine. You will have a P60 for both LTD. and FTE. Make sure they are reflected correctly on the SATR
- make sure dividends are declared on the SATR

Discuss with your accountant. This is very basic stuff so I suspect that you simply don't understand what you're being advised.
And get that CT paid and close the company. You don't need a LTD. (and from reading your post you shouldn't have a LTD.)

[edison]

You cannot be taxed twice on the same employment income. There's something not right if you think you are.

By the way, as a limited company officer, you are not self employed. You understand that, right?

You'd think that was logical but HMRC managed to somehow do this to me about 8 years ago. The details are so tedious I won't repeat them but it was so complicated that even HMRC couldn't quite fix it and I was passed on to some kind of special team for them to resolve.

Several weeks later they wrote to me and reversed the extra tax they were claiming - no acknowledgement they had made a mistake or anything like that. They just issued me a new tax demand for £0. Luckily my accountant helped to sort it.

[northernladuk]

I pay monthly instalments on the final corporation tax (ongoing to March 23) and paid off the final personal tax return.

What's going on here? Why don't you just pay it off in one? You've got the money in the company surely as you can't have paid it to yourself as dividends as that would be an illegal dividend?

Assuming you haven't and you've got yourself in a right mess it's hardly surprising the tax situation is complex.

[Kugel]

What's going on here? Why don't you just pay it off in one? You've got the money in the company surely as you can't have paid it to yourself as dividends as that would be an illegal dividend?

You should ask your accountant if you have one. But company accounts are not prepared on cash basis. You can pay dividends and have cash flow problems due to unpaid invoices at the same time.

[northernladuk]

You should ask your accountant if you have one. But company accounts are not prepared on cash basis. You can pay dividends and have cash flow problems due to unpaid invoices at the same time.

Quite but they also tell me to get a warchest up straight away and not to touch money set aside for taxes. I've seen plenty of people that think they are rolling in it and the last two invoices of the year will pay the corp tax and have ended up short. You said the same yourself in your last post.

I wonder if the OP is another JackD that didn't get the message early enough hence the payment plan or whatever it is.

[ladymuck]

I've always made a provision for CT each month (19% of profits before depreciation) and then set that aside in my 'HMRC' deposit account. The same account all the VAT money goes into. I do not touch that account except to transfer money out to pay HMRC.

I got myself into a right pickle many years ago and, once I sorted myself out, vowed never again. I didn't need to go the route of payment plans or such like but it was a bit of a squeaky bum time for about 6 months.