Self employment (short) notes (2022)

Question 1

Filling in the Self-employment (short) pages

Accepted Answer

It’s important to keep records of your business income and expenses (money received or paid out if you’re using cash basis, see box 8) and any tax that you paid during the year. You’ll need these to help you fill in your tax return or to answer any questions we might have.

There is more information about the records you need to keep on GOV.UK.

If it’s not possible for you to tell us your final figures by the filing deadline, include provisional figures but only fill in boxes 1, 5, 9, 10, 21 or 22, 27.1, 28 and 31 or 32. You must also tell us in Any other information on page TR 7 of your tax return why you’ve used provisional figures and when you expect to give us your final figures. Leave all other boxes blank.

Do not send any receipts, accounts or paperwork with your tax return, unless we ask for them.

Your name and Unique Taxpayer Reference

If you printed the Self-employment (short) pages from the website, fill in your name and Unique Taxpayer Reference (UTR) in the boxes at the top of the form. Your UTR will be on any letters from us about your Self Assessment. If you cannot find it, go to the Find your lost UTR number page on GOV.UK.

Example of completed name and UTR boxes

Your name	Unique Taxpayer Reference
Paul Smith	1 3 5 7 9 2 4 6 3 0

Question 2

Business details

Accepted Answer

Box 1: Description of business

Tell us what your type of business is in box 1. If you’re a foster carer or Shared Lives carer write: Qualifying carer in box 1.

If your income is from letting furnished accommodation in your home, your gross receipts (including any balancing charges) are less than £7,500 (or £3,750 if shared) and you want to use the Rent a Room scheme, put Rent a Room in box 1 and leave the rest of the boxes blank.

If your gross receipts (including any balancing charges) from letting furnished accommodation in your home are more than the £7,500 limit (or £3,750) and you want to use the Rent a Room scheme:

write: Rent a Room in box 1
fill in boxes 2 to 8
put your gross receipts (including services provided) in box 9
put £7,500 (or £3,750) in box 19
put any balancing charges in box 26

You cannot claim expenses, capital allowances or the trading income allowance under the Rent a Room scheme.

There is more information about the Rent a Room scheme on GOV.UK.

Box 4: If you are a foster carer or shared lives carer

Only put X in the box if this applies to you. If your qualifying amount is more than your total qualifying care receipts:

put 0 (zero) in box 31
do not fill in the rest of form SA103s

If your qualifying care receipts are more than your qualifying amount and you use the simplified method to work out your profit:

fill in boxes 2 to 8 (if they apply to you)
put your total receipts in box 9
put your qualifying amount in box 20
fill in boxes 21, 28 and 31

Helpsheet 236 Qualifying care relief: foster carers, adult placement carers, kinship carers and staying put carers will help you fill in the Self-employment (short) pages.

Box 5: If your business started after 5 April 2021, enter the start date

If you started working for yourself between 6 April 2021 and 5 April 2022, put the date you started in box 5.

If you have not already registered for self-employment and Class 2 NICs, you must do so now.

There is more information about registering for self employment on GOV.UK.

Box 6: If your business ceased before 6 April 2022, enter the final date of trading

If you stopped working for yourself between 6 April 2021 and 5 April 2022, put that date in box 6, not your end of year date. Tell us as soon as possible so you do not pay too much tax or Class 2 NICs.

There is more information about what to do if you stop being self-employed on GOV.UK.

If you think overlap relief is due because your accounting date was not 5 April 2022, you must fill in the Self-employment (full) pages.

Box 7: Date your books or accounts are made up to

It’s usual to make your books up to the same date each year. For example, if you made your books up to 5 April 2022, put 05 04 2022 in box 7.

If the date is after 5 April 2022 you must fill in the Self-employment (full) pages.

Box 8: Cash basis

Put an X in box 8 if you used cash basis.

Cash basis is a simpler way of working out your business profits or losses. You add up all your business income received (your turnover) and take off any allowable expenses paid in your accounting period. Do not include money you owe or owed to you at your end of year date.

Certain businesses cannot use cash basis.

There is more information about cash basis on GOV.UK.

If you used cash basis last year, use it again this year, unless it no longer suits, for example you want to claim loss relief against your income.

If you’re a sub-contractor in the construction industry, your income is the full amount, before contractor deductions.

You may start to use cash basis this year if:

this is your first year in business
you used traditional accounting last year

If you change basis this year, from cash basis to traditional accounting basis or from traditional accounting to cash basis, you may need to make a transitional adjustment.

There is more information about how to calculate your taxable profits on GOV.UK.

Question 3

Business income

Accepted Answer

Box 9: Your turnover

Do not include SEISS grants in this box, put them in box 27.1 on page 2.

If you use traditional accounting, put the total amount of income earned by your business before taking off any expenses in box 9. Include:

all payments — cash, card, cheque or any other method
fees, tips and commissions
any payments in kind (that is, goods or services received in exchange for work done or goods sold)
money owed to you for work already done

Do not include coronavirus support payments in this box (see box 10 and box 27.1).

If you’re using cash basis only include the income received.

If your turnover is up to £1,000, read Trading income allowance on page SESN1.

If you’re a subcontractor, make sure you include the full amount for the accounting period (before any CIS deductions made by contractors).

Box 10: Any other business income (do not include SEISS, but include other COVID supporBt payments such as CJRS)

Do not include in box 10 payments from the SEISS — see box 27.1.

Coronavirus support scheme payments are taxable and include payments from the CJRS, Eat Out to Help Out Scheme, self-isolation support schemes, any other applicable HMRC coronavirus support scheme and payments you were entitled to receive from local authorities or devolved administrations.

If you received coronavirus support scheme payments, include in box 10 the amount you received.

If you have received an assessment issued by an officer of HMRC in respect of a coronavirus support scheme payment incorrectly claimed, only include in box 10 the amount you kept.

Do not include in box 10 the amount of any sum that has been assessed which results in the repayment of coronavirus support scheme payments that you were not entitled to.

If you received Eat Out to Help Out payments and are VAT registered, exclude VAT from the amount you include in box 10.

Do not include CJRS payments received as an employee whilst furloughed.

If you received a SEISS, CJRS, Eat Out to Help Out Scheme (or any other applicable HMRC coronavirus support scheme payment that you were not entitled to) and you have not voluntarily paid it back to HMRC or you have not received an assessment issued by an officer of HMRC in respect of the incorrectly claimed payment, put the incorrectly claimed amount on page TR 5 of the main tax return SA100.

Also include income which constitutes trading income but is not included in your turnover.

For example, income from letting part of your business accommodation, payments for the right to cross your land, non-arm’s length reverse premiums and amounts treated as profit by the trading income provided through third party rules.

Do not include income from another trade or business. This goes on separate Self-employment pages.

Box 10.1: Trading income allowance

Before completing box 10.1, read Trading income allowance on page SESN 1. If you have more than one self-employment or miscellaneous income (see box 17: Other taxable income section of the Tax return notes), the total amount claimed cannot exceed £1,000.

You cannot claim the trading income allowance to make a loss.

Question 4

Allowable business expenses

Accepted Answer

Expenses vary from business to business. Allowable expenses include wages, rent, lighting, postage, phone calls and motor costs such as fuel and insurance. Helpsheet 222 How to calculate your taxable profit lists allowable business expenses.

Some expenses are only partly allowable. For example, you can only claim the business part of the cost of using your own car or using a room in your home as your office.

The cost of entertaining, depreciation of equipment, your own salary, wages, drawings and NICs are not allowable expenses.

If you claim the trading income allowance, you cannot deduct any allowable expenses or claim any other allowances on this income.

If you use traditional accounting do not include the cost of buying a vehicle or other equipment.

If you use cash basis

Allowable expenses include payments for capital expenditure, unless the expenditure is specifically disallowed. You can only claim up to £500 of any payments of interest and other costs for cash borrowings.

There is more information on disallowed capital expenditure on GOV.UK.

Question 5

Simplified expenses

Accepted Answer

Simplified expenses use flat rates instead of actual business expenses.

You can use simplified expenses to work out:

business costs for vehicles
business use of your home or the adjustment for private use of business premises as a home (not both)

You have to calculate all other expenses in the usual way.

There is more information about simplified expenses on GOV.UK.

Boxes 11 to 20

Fill in boxes 11 to 19 and put the total in box 20.

If your annual turnover was below £85,000, you may just put your total expenses in box 20. If you claim the trading income allowance in box 10.1, do not complete boxes 11 to 20. Include in box 13 wages funded by the Coronavirus Job Retention Scheme paid out to employees.

There is more information about expenses you can claim on GOV.UK.

Question 6

Net profit or loss

Accepted Answer

Box 21: Net profit

Add boxes 9 and 10 together. If the total is more than the figure in box 20, put the difference in box 21.

Box 22: Net loss

Add boxes 9 and 10 together. If the total is less than the figure in box 20, put the difference in box 22.

Question 7

Tax allowances for certain buildings, vehicles and equipment (capital allowances)

Accepted Answer

Boxes 23 to 26

You can claim capital allowances for the costs of buying and improving equipment such as:

vans and cars
tools and computers
shelves, furniture and electrical fittings
certain structures and buildings

The type of capital allowance and amount that you can claim will depend on your assets and other circumstances, for example, there are special rules for cars.

You cannot claim capital allowances if you’re claiming the trading income allowance (in box 10.1) or using cash basis. The only exception for those using the cash basis (and not claiming the trading income allowance) is cars.

If you’ve previously claimed capital allowances for a car used in your business, you may continue to claim the allowance in boxes 24 and 25. Include any business part of the actual running costs as an allowable expense in box 12. You cannot use flat rates.

If you’ve never claimed capital allowances for the car, you can choose to use flat rate, or claim capital allowances.

If you’ve claimed the trading income allowance (box 10.1) do not complete boxes 23 to 25.2.

There is more information about capital allowances on GOV.UK.

Box 23: Annual Investment Allowance

You may be able to claim Annual Investment Allowance (AIA) if you bought equipment (but not cars) during the year.

There is more information about capital allowances and the Annual Investment Allowance on GOV.UK.

Where you use an item of equipment for both business and private purposes, you must reduce the AIA claimed by the private use proportion.

Example of how to calculate AIA

Chris buys tools for £5,000 and a van costing £10,000.

The tools are for business use only. However, Chris uses the van for business 60% of the time and for private motoring 40% of the time so he must reduce the amount of AIA he claims on the van to reflect his private use. He has two pools, one for the van (because of his private use of it) and one for the tools (used wholly for business). The AIA he can claim for the van is £6,000 (£10,000 minus 40% private use).

Chris’s total AIA claim is £11,000 (£5,000 for the tools plus £6,000 for the van). After he has claimed AIA he will have 2 pools of expenditure. The balance in each pool will be nil.

If Chris claimed AIA for items, such as tools or a van, and he later sells (disposes of) those items, he may need to pay back part of his allowance. This is a balancing charge.

Box 24: Allowance for small balance of unrelieved expenditure

If the balance of qualifying expenditure in the main or special rate pool (see: How to calculate a capital allowances pool balance) is £1,000 or less, you can claim a small pools allowance of up to the full amount instead of the writing down allowance, you cannot claim both.

Box 24.1: Zero-emission car allowance

Claim the 100% first year allowance (the full cost) of any new and unused zero-emission or electric cars in this box.

If you use a car outside of your business, you must reduce the claim in proportion to the non-business use.

Box 25: Other capital allowances

First Year Allowance (FYA)

You can check if you can claim FYA and how much on GOV.UK.

18% writing down allowance

Claim 18% writing down allowance on the balance of expenditure on equipment in the main pool, the unrelieved amount is carried forward to your next period. This expenditure includes cars bought on or after 6 April 2021 with CO2 emissions above 0g/km and not exceeding 50g/km.

6% writing down allowance

Claim 6% writing down allowance on the balance of expenditure in the special rate pool. This expenditure includes certain parts of buildings such as electrical systems and cars bought on or after 6 April 2021 with CO2 emissions of more than 50g/km.

There is more information on how to work out your capital allowances on GOV.UK.

How to calculate a capital allowances pool balance

Start with the unrelieved expenditure in the pool at the end of the previous chargeable period. Add the balance of qualifying expenditure for which a claim to first year allowance was made in the previous chargeable period. Add all qualifying expenditure for the pool incurred in this chargeable period except for expenditure for which a claim to first year allowance is made.

Deduct the claim made to AIA. Deduct the total of all disposal values (usually receipts) for assets no longer used in the business. The result is the pool’s balance of qualifying expenditure.

If you use equipment or cars for both business and private purposes, you must reduce the allowances you claim by the private use proportion. You must keep a separate pool of expenditure for each of the items you use for private purposes, this is called a single asset pool. The allowance for small balance of unrelieved expenditure does not apply to single asset pools.

Box 25.1: The structures and buildings allowance

If you’re eligible to claim the structures and buildings allowance, put the amount of the claim in box 25.1 (unless you’re claiming the enhanced rate of structures and buildings allowance for Freeport tax sites, in which case, put the amount of the claim in box 25.2). If you’re claiming for the first time in respect of an amount for qualifying expenditure, use the Any other information box (box 19 on page 7) of your tax return, to record the:

date the building first came into qualifying use or if later, the date the qualifying expenditure was incurred
total amount of qualifying expenditure incurred

See Claiming capital allowances for structures and buildings to check if, and how much, you can claim.

Box 25.2: Freeport structures and buildings allowance

If you’re eligible to claim the enhanced structures and buildings allowances for Freeport tax sites, put the amount of the claim in box 25.1. If you’re claiming for the first time in respect of an amount of qualifying expenditure, use the Any other information box (box 19 on page 7) of your tax return, to record the:

Freeport to which the claim relates
address or location of the structure or building
date the building first came into qualifying use or, if later, the date the qualifying expenditure was incurred
total amount of qualifying expenditure incurred
date the first contract for construction was entered into

See Check if you can claim enhanced structures and buildings allowance relief in Freeport sites to check if, and how much, you can claim.

Box 26: Total balancing charges

If you sell an item you’ve claimed capital allowances on, and the sale proceeds or value of the item is more than the pool value or cost, you’ll have to pay tax on the difference (a balancing charge).

Put the total balancing charge in box 26.

Question 8

Calculating your taxable profits

Accepted Answer

Box 27: Goods and or services for your own use

If you take goods or stock out of the business and you use traditional accounting, put the normal sale price in box 27.

If you use cash basis, put the disallowable amount (usually the cost of the goods or stock) in box 27.

If you put the full cost of expenses in boxes 11 to 19, you’ll need to include any disallowable amounts in box 27.

Box 27.1: Self-Employment Income Support Scheme grant received in the year to 5 April 2022

If you received any payments under the SEISS, include in box 27.1 the amount you were entitled to.

If you’ve received an assessment issued by an officer of HMRC in respect of a SEISS grant incorrectly claimed, only include the amount you retained in box 27.1.

Do not include in box 27.1 the amount of any sum that has been assessed which results in the repayment of a SEISS grant that you were not entitled to.

Include in box 27.1 the amount you were entitled to regardless of the dates your books or accounts are made up to (in box 7).

If the amount you were entitled to and received relates to multiple self-employments, or this self-employment and one or more partnerships, only include the amount relating to this self-employment. Apportion the payment between the self-employments, or this self-employment and the partnership or partnerships, on a just and reasonable basis. The total of all apportioned amounts should equal the total amount of SEISS grant you were entitled to and received.

If you received a SEISS payment that you were not entitled to and have not voluntarily paid it back to HMRC or you have not received an assessment issued by an officer of HMRC in respect of the incorrectly claimed payment, put the incorrectly claimed amount on page TR 5 of the main tax return SA100.

Example of a SEISS grant

Sam is a self-employed hairdresser and is also a partner in a partnership. She receives a SEISS grant of £4,000, 75% of which she determines relates to her self-employment. She includes £3,000 in box 27.1 and £1,000 in box 9.1 of her Partnership pages.

Boxes 28 and 31 or 32

You can use this working sheet to work out the figures for boxes 28 and 31 or 32.

Box 30: Any other business income not included in box 9 or box 10

This includes any other business income which is not trading income.

Question 9

Losses, Class 2 and Class 4 NICs and CIS deductions

Accepted Answer

Boxes 33 to 35: Losses

You can claim tax relief for any losses you made. The amount of tax relief you claim against your income may be restricted or limited. If you’ve already made a claim for your 2021 to 2022 loss, include the loss in boxes 33 or 34 and give us the details in Any other information on page TR 7 of your tax return.

There is more information about losses in the HS227 guidance on GOV.UK.

See the Limit on Income Tax reliefs (Self Assessment helpsheet HS204) for more information on limits on Income Tax reliefs.

Box 33: Loss from this tax year set off against other income for 2021 to 2022

Only include a loss for this tax year in box 33. If the loss is more than your other income (or your income is nil), put your other income amount (or nil) in box 33. You can claim the balance of your loss against any capital gains for 2021 to 2022, or fill in box 34 or 35.

Do not fill in box 33 if you’re using the cash basis.

Box 34: Loss to be carried back to previous years and set off against income (or capital gains)

You can carry losses back to use against the following:

Income for the 2020 to 2021 tax year

If your loss is more than your income, you can use the remaining loss against 2020 to 2021 capital gains (do not make this claim if you use cash basis).

Income in the 3 previous years

You should start with the earliest year. Only make this claim if your business began after 5 April 2018 (do not make this claim if you use cash basis).

Profits of this business in the 2021 to 2022 tax year and 3 previous tax years

Start with the latest tax year. Only make this claim (for terminal loss relief) if your business ceased in the 2021 to 2022 tax year. The losses you can claim are the losses made in the last 12 months of trade.

Profits of the same business in the previous 3 tax years

The total amount of loss that can be carried back to the 2019 to 2020 and 2018 to 2019 tax years is restricted to a total of £2 million across both tax years (this restriction does not apply to the 2020 to 2021 tax year). Start with the latest year.

If you use cash basis, the only claim you can make is for terminal loss relief.

If you fill in box 34, give details of the amount claimed and for which year in Any other information on page TR 7 of your tax return.

You can find more information on terminal loss relief on the HS227 helpsheet.

Box 35: Total loss to carry forward after all other set-offs

Carry your unused losses forward to set against any future profits from the same business. Include losses from previous years that you’ve not already used up in box 35.

If you use cash basis and you’ve not made a claim for terminal loss relief, put your loss in box 35.

Box 36: If your total profits for 2021 to 2022 are less than £6,515 and you choose to pay Class 2 NICs voluntarily, put X in the box

If your taxable profits are £6,515 or more, you pay Class 2 NICs (£3.05 a week). If your profits are less than £6,515 or you made a loss, you can pay Class 2 NICs voluntarily to protect your State Pension and certain benefits. You must be registered as self-employed to pay Class 2 NICs or to pay voluntarily.

If you’re registered for Self Assessment but not as self-employed read register for Self Assessment (self employed) on GOV.UK.

If you’re employed and self-employed, you may be able to pay a lower amount of Class 2 NICs depending on the amount of Class 1 National Insurance you pay from your wages.

You still have to pay Class 2 NICs during a temporary break if you intend to continue being self-employed. This includes if you are:

a writer undertaking research
in short-term employment
on holiday
on jury service

Put an X in box 36 if you want to pay Class 2 NICs voluntarily. You cannot change your mind after you have paid.

You cannot pay Class 2 NICs voluntarily through Self Assessment after 31 January 2023.

There is more information on how much National Insurance you need to pay and voluntary contributions on GOV.UK.

Box 37: If you’re exempt from paying Class 4 NICs, put X in the box

You do not have to pay Class 4 NICs if you:

reached State Pension age on or before 6 April 2021
were aged under 16 on 6 April 2021
were not resident in the UK for tax purposes during the 2021 to 2022 tax year

Only put an X in the box if you’re exempt.

You can find your State Pension age on GOV.UK.

Box 38: Total Construction Industry Scheme deductions taken from your payments by contractors

If you’re a subcontractor, add up all the deductions made by contractors from 6 April 2021 to 5 April 2022. Use the statements that contractors gave you.

If you have not received all the CIS statements you need from your contractor, go to What you must do as a CIS subcontractor on GOV.UK.

Do not send these with your tax return.

Even if you’ve already claimed a CIS repayment, put the deductions in box 38. If you’ve received a refund of CIS deductions, make sure you include it in box 1: Tax refunded or set off on page TR 6 of your tax return.

If you put any figures in box 38, check you’ve included the full amount of income (before taking off the CIS deductions) for the accounting period in box 9: Your turnover.

Question 10

More help if you need it

Accepted Answer

You can get copies of any tax return forms or helpsheets on GOV.UK.

You can contact Self Assessment: general enquiries for help with your tax return.

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Check if you still need to fill in a tax return

Coronavirus support scheme payments

Incorrectly claimed coronavirus support scheme payments

Trading income allowance