Registered Posts: 37 Regular contributor ⭐
I am analising a clients previous tax returns and have stumbled across a query that I thought someone out there is bound to know!

In the year 1999/00 net profit is 14.187
less personal allowance 4,335

income on which tax due 9,852.00

1,500 @ 10% 150.00
8,352 @ 23% 1,920.96
tax due 2.071

AND this is the bit i am confused with.....
minus married couples allowance
985 @ 10% 98.50

PLUS NI contributions

6657 @ 6% 399.42

Question is......... What is the 6657 based on??!!

Any advice greatly appreciated - as always.

:cool2:

• Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
What happened in the year before?

It could be that losses had been utilised against other income but not yet against Class 4 NI.
• Registered Posts: 114 Dedicated contributor 🦉
I may just be being dumb here but could this be the calculation.

Class 4 self employed rate for the year was 6% on profits 7530-26000 p.a.

14187-7530 =6657
• Registered Posts: 114 Dedicated contributor 🦉
I also cant understand the tax workings.

Profit 14187

Allowances 4335 +985 =5320

Taxable pay 14187-5320=8867
1500x10%=150
7367x23%=1694.41

Total tax due 1844.41

Karen
• Registered Posts: 646 Epic contributor 🐘
Karen, the MCA is a 'Tax reducer', it works as a Tax Credit not as an income reducer such as the P/A.

Regards

Dean
• Registered Posts: 114 Dedicated contributor 🦉
Oh, got that wrong then.
As an ex PAYE Tax officer ( many years ago) I asumed the MCa was added to the allowances as it was in my time with the revenue
• Registered Posts: 37 Regular contributor ⭐
The figures i have given are the ones that HMRC have assessed for him!

Dean, I do not have the year before information so you could be right there. However, I am still not sure about the £6657, as the Ni should be based on the taxable income and even taking into account the 985, it still doesn't add up.