Flat rate deduction to SA return increases tax why

Why does adding an approved flat rate deduction to the employment section increase tax liability?

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On completion of the employment section of an HMRC self assessment tax return, adding £120 as a flat rate deduction increases the tax liabilty when 'view calculation' is selected.  This figure represents the average annual cost of repair and maintenance of tools or special clothing.  In this case, it relates to an engineer in the heating industry.  Isn't the whole point of claiming this allowance to reduce an income tax liability?

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By Tim Vane
17th Jan 2017 01:20

I recently had a new client who had previously been filing themselves and had been putting their fixed deductions into box 16 instead of box 18 for the last couple of years. I haven't used the HMRC software in a while so I can't be sure why they were doing this but is there perhaps some poor labelling of the fields and the figure is being included as an expenses payment instead of a deduction?

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RLI
By lionofludesch
17th Jan 2017 07:25

As a user of HMRC software until a couple of years ago, I can say I never had this problem. The fields are labelled as on the tax return and are clear enough.

However, I suspect that the OP has confused "Expenses Allowances" with "Fixed Deductions for Expenses".

If he'd like to provide us with more information ......

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By agentevr
19th Jan 2017 18:26

Thank you for your replies, I realise now that the fixed rate deduction should be entered against the field 'Fixed deductions for expenses' and NOT in the field 'Expenses payments received'.

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Replying to agentevr:
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By DMGbus
19th Jan 2017 19:00

That's what I expected, an easy mistake to make.

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