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.
Please note that FreeAgent's Self Assessment functionality won't be available if you have an unincorporated landlord account or if you're preparing your accounts using the cash accounting basis.
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 section of your tax return for each of your jobs.
If you had a job during the tax year, you will have been given by your employer, a form P60 which shows your salary for the tax year, and any tax you paid on that.
You may also have been given a form P11D if you've received benefits such as a company car, or been reimbursed expenses.
We'll look at each of these in turn, summarising the most commonly used boxes. For more information, speak to your accountant or HMRC, or see their guidance.
NB: FreeAgent cannot advise you on how to fill in your tax return correctly, nor can we check your figures to see if they are correct, unless they have been calculated by the software. We are not authorised by HMRC to provide accounting or tax advice. If you are in any doubt as to whether a figure on your tax return is right, you need to speak to your accountant or to HMRC.
You need to make sure that you have a P60 for the right tax year.
On the form P60, the two boxes that you need to take note of, and transfer to 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. These go into boxes 1 and 2 of the Employment section of your tax return.
The employer's details, such as name and PAYE reference, also need to be filled in.
If you have any P45s from previous employment within the tax year, you’ll need to enter that into the ‘Add an additional employment’ section of the ‘Employment’ form.
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. The way that this is calculated has changed for tax returns relating to the 2016/17 tax year onwards.
Previously, you will have been asked to select to defer your Class 4 NI payments on your Self Assessment so that HMRC could calculate the correct liability for you. Now, however, you should enter details from the P60 your employer gave you in the ‘Class 4 National Insurance maximum charge’ area, as shown below. FreeAgent will work out how much you’re liable to pay based on your earnings.
Exempt from class 4 NICs? Navigate to the 'Self Employment page'
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 ‘No’ in either box 37 (if you’re using the short form) or box 101 (if you’re using the long form) of the ‘Class 2 and Class 4 National Insurance contributions (NICs)’ area.
If your employer gave you a form P11D, then you should fill in the boxes in the Employment section of the tax return, from box 9 onwards, which correspond to the boxes on the form 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.
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