Ftax Individual (SA100)

The calculations performed by the SA100 mirror those published by HMRC precisely.

There are a few circumstances where the HMRC calculations do not result in the correct tax being calculated

HMRC has published details about the circumstances when this occurs and has stated that tax payers in these circumstances must file their return on paper. As such, you may find that after you click ‘Calculate’ the form alerts you that you fall into one of these categories and that you must file a paper return.

If this happens to you, you should seek advice from a qualified tax accountant able to perform the calculation for you and then file a paper tax return.

The rules for Class 2 NIC have changed for the 2023/23 tax year onwards.

Prior to the 2022/23 tax year you needed to pay Class 2 NIC if your profits were above the Small Profits Threshold, which was £6,515 in the 2021/22 tax year.

For 2022/23 onwards, you pay Class 2 NIC if your profits are above the Lower Profits Limit,(which is £11,908 in 2022/23). If your profits are below the Small Profits Threshold (£6,725 in 2022/23) then you can choose to pay voluntary Class 2 NIC.  If your profits from self-employment are between the Small Profits Threshold and the Lower Profits Limit then there is no Class 2 NIC to pay – instead you will be treated as making Class 2 NIC. This will mean you will be able to access entitlement to contributory benefits in the same way as if you had paid Class 2 NIC.

For 2023/24 onwards, the Lower Profits Limit will be the same amount as the personal allowance for income tax.

Further information on this is available from the Government website here:
https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions 

Class 1 and Class 2 National Insurance details need to be entered into the Ftax SA100 in order to correctly calculate your tax liability.

If you are self-employed or a partner and your combined profits exceed £6,475 (for 2020/21) and you have worked the full year, you will likely need to enter £159 (for 2020/21) in one of the Class 2 NI boxes.

Please note that payment of Class 1 and 2 National Insurance is not made via this self-assessment process.

Class 1 National Insurance

Class 1 National Insurance is based on your total earnings from Employment and Ministers of Religion sections, between the Primary Threshold (PT) and the Upper Earnings Limit (UEL). These details can be found on your P60.

The information must be entered into boxes on the Employment (page E1) and Ministers of Religion (page MoR1) sections of the Ftax SA100. Next to the boxes, there is a red question mark which will provide an example of how to find the relevant on your P60.

The Total NICable earnings are shown on page TR8.

Class 2 National Insurance

Class 2 National Insurance contributions are not calculated by the Ftax SA100 – they must be entered into one or more of the Self Employment (pages SES2 and SEF5), Lloyds Underwriters (page LU4) and Partnership (pages SP2 and FP2) sections of the form.

The Total Class 2 NIC are shown on page TR8.

Note 1: If you have completed any of the above sections, and your “Total Profit Less Adjustments Used For Class4 And Class2” is over the “Class 2 NIC Small Profit Threshold” (£6,475 for 2020/21), then you will likely have to pay Class 2 contributions. If you leave all the data entry boxes blank in these circumstances, then you will be warned that you might have made an error when you click Calculate on the front page.

If you do need to enter a zero figure, simply enter 0 (zero) into one of the relevant boxes. Most people over the state pension age should enter a zero figure in one of the boxes.

Note 2: If you do have to make Class 2 contributions, they will likely be £3.05 per week (£159 for a whole year) or £3.70 (£193 for a whole year) for Share fishermen, in 2020/21, but in any case should not exceed £196.10 in total (in 2020/21).

If you have been Self Employed, a Lloyds Underwriter or in a Partnership, for less than the whole year (for example, because you started part way through the year, or have reached state pension age during the year), then you will likely have paid less than a whole year’s contributions. In this case you should enter your reduced figure into the relevant box(es).

Note 3: If you have made voluntary Class 2 contributions, there is a tick box next to the Class 2 NI box which you should tick (in addition to entering the amount).

New Class 2 NIC rule

The rules for Class 2 NIC have changed for the 2023/23 tax year onwards.

Prior to the 2022/23 tax year you needed to pay Class 2 NIC if your profits were above the Small Profits Threshold, which was £6,515 in the 2021/22 tax year.
For 2022/23 onwards, you pay Class 2 NIC if your profits are above the Lower Profits Limit,(which is £11,908 in 2022/23). If your profits are below the Small Profits Threshold (£6,725 in 2022/23) then you can choose to pay voluntary Class 2 NIC.  If your profits from self-employment are between the Small Profits Threshold and the Lower Profits Limit then there is no Class 2 NIC to pay – instead you will be treated as making Class 2 NIC. This will mean you will be able to access entitlement to contributory benefits in the same way as if you had paid Class 2 NIC.

For 2023/24 onwards, the Lower Profits Limit will be the same amount as the personal allowance for income tax.

You can find bookmarks to all the relevant National Insurance pages of the Ftax SA100 in the left hand bookmarks area.

The video ‘How to use the Ftax SA100’ takes you through all of the mains steps needed to prepare and submit the SA100 tax return. Click here to watch.

The video ‘How to use the Ftax CT600’ takes you through all of the mains steps needed to prepare the CT600 tax return, along with required iXBRL attachments. Click here to watch. Further help can be found in the ‘iXBRL/CT600’ section of the FAQS.

If you are experiencing problems entering data in the Ftax SA100 or CT600 form, generating a Pdf Copy or iXBRL file, or submitting to HMRC, then you should attach the entire Ftax form with attachments to your Support Request. Cut and paste any error messages you receive into the support request message. This will help the Ftax Support team to respond much faster. Click here to send a Support Request.

A couple who are married or in a civil partnership may be able to transfer some unused Personal Allowance from one partner to another.

This process must be initiated by the partner transferring the allowance OUT (usually the lower or non taxpayer) to their partner.

The partner receiving the extra allowance has had a transfer IN from their partner.

The process must be done directly with HMRC either via their website https://www.gov.uk/marriage-allowance or by telephone.
The person transferring their allowance OUT will need to supply their partner’s full name, National Insurance number, date of birth and date of marriage or civil partnership.

Once HMRC has accepted the transfer, they will automatically apply the change in tax to both partners’ tax accounts.

In order for the Ftax SA100 to accurately calculate your tax due, you should record transfers (both OUT and IN) on page TR5 of the Self Assessment tax return.

If you have transferred a Personal Allowance to your spouse or civil partner, then tick Transfer OUT and complete boxes 1 to 5.

If a Personal Allowance is being transferred to you, then simply tick Transfer IN. Do NOT complete boxes 1 to 5. 

Please note that a Transfer IN will only affect your tax calculation if you are not a Higher Rate tax payer and both your Married Couples Allowance and Married Couples Surplus Allowance are zero. 

There appears to be a problem with the latest versions of Acrobat Reader 2021.001.20135 and 2021.001.20138 which causes Ftax forms to run slowly at times, or not to respond.
If you install a previous version of Acrobat Reader, this problem will be overcome.

To install a previous version (Windows users):

First, uninstall your current version of Acrobat Reader.

1. Click the start menu and right click Acrobat Reader DC.

2. From the menu that pops up, select Uninstall to access the Programs and Features control panel.

3. Select Adobe Acrobat Reader DC from the list of programs and click Uninstall from the top to start the uninstall process.

4. Follow the windows prompts until the software uninstalls.

Second, Download and install a previous version of Acrobat Reader from Adobe.

1. Open a Windows Explorer/File Explorer window (press Win+E).

2. Click to select the Address bar.
If the Address bar isn’t visible in Windows XP, choose View > Address Bar

3. In the address bar type the address of Adobe’s software storage:

ftp://ftp.adobe.com/pub/adobe/reader/win/

for windows, or 

ftp://ftp.adobe.com/pub/adobe/reader/mac/

for mac, and press enter.

Note: This is a Windows Explorer/File Explorer window not a browser window.

4. You should be presented with a file structure of previous versions of Reader.

We have identified that the problem does not occur if you use AcrobatDC 2001320064.

If you wish to download and install this version, open the ReaderDC folder, then open the 2001320064 folder and copy the file AcroRdrDC2001320064_en_US.exe to your computer by dragging it onto your desktop (or other location). This is the english language version, other versions are available.

5. Once the file is downloaded onto your computer, double click the file to start the installation, and follow the Adobe prompts.

Don’t forget, you will need to follow the setup checklist again with your new software:

What should I check before using Ftax? (Ftax Setup Checklist)

If Acrobat Reader updates to the latest version and Adobe have not fixed this problem, you will need to follow this process again.

If you have any problems uninstalling Acrobat Reader, Adobe have produced a tool called AcroCleaner to help:
https://www.adobe.com/devnet-docs/acrobatetk/tools/Labs/cleaner.html

There are a few tax circumstances where the HMRC tax calculation gives an incorrect amount of tax due.

These vary from year to year, as problems are fixed and new ones arise.

HMRC publishes a set of Exclusions which define these circumstances and give a recommended workaround (commonly, the workaround is to submit a return on paper).

If your tax return fits into one of these categories, you will be alerted when you calculate your tax and the workaround will be suggested. Ftax will not prevent you from submitting the incorrect data, but your return may be rejected by HMRC, or you may be paying the wrong amount of tax if you do.

HMRC have stated:

“Where a personal return cannot be filed online for a reason listed below [an Exclusion] , provided that a paper return is delivered on or before 31st January following the end of the tax year to which the return relates, HMRC will accept that the taxpayer had a reasonable excuse for failing to file a paper return by the normal 31st October deadline. A reasonable excuse claim should accompany the paper return.”

There is a mistake in HMRC’s calculation for a number of tax payers with incoming Marriage Allowance Transfers.

HMRC have stated the following:

HMRC Exclusion 105

For most customers MAT_IN is retained and the SA tax calculator correctly re-allocates reliefs and allowances to be
able to do so. However, for customers who have dividend income that is in the nil band that would otherwise be
taxable at both basic rate and higher rate the Marriage Allowance transfer amount of £238.00 (£1,190 x 20%) is not
retained when the calculator should be allocating allowances to reduce dividend income in that would be in the basic
and higher rate band were it not for the dividend allowance nil band.
An example is a customer with MAT_IN, Employment (EMP1) £50,495, Savings (INC2) £45, Dividends (INC4) £997 and
Gift Aid £4,145 (£5,945 gross). The MAT_IN is disallowed and the SA tax calculator sets PA £11,850 against non-savings.
The liability is £7,729.00. By setting PA £997 against the dividend income MAT_IN is retained and the liability is
£7,690.40, a difference of £38.60.
Note that for MAT_IN to be retained there can be no dividend income in the higher rate or in the higher rate nil band.
However, there can be savings income in the higher rate nil band (but none in the higher rate). In this example there is
£5 in the higher rate nil band.
The number of customers affected is tbc
The maximum a customer will have overpaid as a result of this is MAT_IN £1,190 x 20% £238.00 minus amount of PA re-
allocated to dividends x 20%. In this example that is £238.00 minus £199.40 (£997 x 20%) = £38.60.

In these circumstances a paper return should be filed.

The Ftax SA100 identifies and alerts customers affected when you click Calculate. If you are affected it is recommended that you file a paper return.