Q: Does money I pay into my business account from my personal account count as income?
A: No. Any personal contributions into the business is considered capital NOT income. Likewise, money taken out is considered drawings NOT expenses.
Q: What is the allowed mileage rate?
A: 45p per mile (up to 10,000 miles a year)
Q: I make contributions towards a personal pension. Is this an allowable expense?
A: No. However, assuming your pension provider gives you basic tax relief (e.g. you pay £100 per month but they register £125 in your pension account) you can then enter the total amount paid in the section – ‘Payments to registered pension schemes (Also known as PPR)’
Q: I am asked if I want to transfer 10% of my personal allowance to my spouse/civil partner. What does this mean and is it useful to do?
A: You can only do this if you are married, and yes it is worthwhile if you’re not using all your personal allowance. It means you would give your partner a small share of your £12,500 taxable allowance – your allowance would decrease to £11,250, and you partner’s would increase to £13,750.
Q: Do I use the cash basis (money actually received and paid out) to calculate my income and expenses for my self-assessment?
A: Generally, yes. However, it would be no if you made a loss.
Q: Where do I put my Child Benefit income?
A: You only need to declare it if your taxable income is over £50,000.
Q: In part of the online self-assessmentform it says, ‘Underpaid Tax’ then says £0.00. Is that normal?
Q: Where can I find out more information to help me complete my self-assessment?
A: Beside most of the questions online, you will see a question mark in a circle. If you click on this, a box will pop up and tell you more about what is being asked. You can also find more useful information on HMRC’s website, or in our book The Magical Mix of Money & Tax – a practical guide to managing your accounts, tax and money to bring balance into your life.
Helen Monaghan is a Chartered Management Accountant, accredited NLP Practitioner & Finance Coach. Both a psychology graduate and an accountancy graduate, she has authored three business books, which beautifully bring together psychology, finance, and tax to empower the reader about money. Helen is also the founder of HM Finance Coaching Ltd, a company that provides financial education and business mindset coaching to small businesses across the UK, in addition to accountancy services for limited companies in Scotland.