The Employment page of the Self Assessment tax return for sole traders

This article provides a summary of the Employment page of the Self Assessment tax return and the relevant information required to complete it, if you're a sole trader.

This is relevant for sole traders who also have a full-time job, or one or more part-time jobs, as well as being self-employed. If you have more than one job, you'll need to fill out an Employment page on your tax return for each of your jobs. 

If you had a job during the tax year, you’ll have been given a P60 by your employer which will show your salary for the tax year and any tax you paid on that. If you left a job during the tax year, you’ll have been given a P45.

You may also have been given a P11D if you've received benefits such as a company car, or been reimbursed expenses.

We are not authorised by HMRC to provide accounting or tax advice. Therefore, FreeAgent’s Support team cannot advise you on how to fill in your tax return correctly or check your figures to see if they are correct, unless they have been calculated by the software. If you’re unsure whether a figure on your tax return is right, please speak to your accountant or to HMRC.

P60

First, you need to make sure that you have a P60 for the right tax year.

On the form P60, the two amounts that you need to take note of and enter on the Employment section of the tax return, are marked clearly with asterisks. They're the taxable gross pay, and the tax that was taken off your pay.

To enter these in FreeAgent, you’ll need to enter that employer’s name and select ‘Add Employment’ on the Employment page.

Enter the amounts from the P60 into boxes 1 and 2. The employer's PAYE reference also needs to be entered in box 4. If your employer does not have a PAYE reference enter 'None' (without the apostrophes) into box 4.

When you enter a PAYE reference, make sure that the first part of it has three digits. If your employer's PAYE reference only has two digits in the first part, e.g. 25/A1234, then please enter a 0 before the first digit, e.g. 025/A1234.

P45

If you have any P45s from previous employment within the tax year, the figures you’ll need are the ‘Total pay to date’ and ‘Total tax to date’ plus your former employer’s PAYE reference number.

To enter these in FreeAgent, you’ll need to enter that employer’s name and select ‘Add Employment’ on the Employment page.

Enter the amounts from the P45 into boxes 1 and 2. The employer's PAYE reference also needs to be entered in box 4.

Class 4 National Insurance

If you have earnings from both employment and self employment, your Class 4 National Insurance contributions may be restricted to ensure that you don’t pay considerably more National Insurance than a person who has a similar level of earnings from a single employment.

Enter the relevant amount from the P60 your employer gave you in the ‘Class 1 from P60’ field in the ‘Class 4 National Insurance maximum charge’ section. The amount will be labelled ‘Earnings above the Primary Threshold, up to and including the Upper Earnings Limit’. FreeAgent will work out how much you’re liable to pay based on your earnings.

Exempt from class 4 NICs

If you are exempt from paying class 4 NICs (e.g. if you are under 16, over state pension age, or not resident in the UK for tax purposes), you should navigate to the Self-employment page of your Self Assessment in FreeAgent and select ‘Yes’ in either box 37 (if you’re using the short version) or box 101 (if you’re using the long version) of the ‘Class 2 and Class 4 National Insurance contributions (NICs)’ area.

P11D

If your employer gave you a form P11D, you’ll need to complete box 9 onwards on the Employment page of the tax return, using the information from the P11D.

If expenses are recorded on the form P11D, expenses that the employer has actually paid back to you go into box 16. Expenses that you've incurred and are entitled to tax relief on, go into boxes 17-20.

If your employer has obtained a dispensation and does not need to report certain expenses on forms P11D, then any expenses not reported because of this, would also be left off your individual tax return.