Tax Calculation & class 4NIC

ACServices

Hi,

Am I right in saying that on a basic tax calculation for self assessment if someone earned a profit of circa £8.9k
they would pay tax and class 4 of circa £450 this is for the yr 2011/12
or would this be more/less due to them earning paye gross of £3.9k and paid tax of 330 before becoming self employed.
All class 2 is paid.

Thanks for the assistance.

Regards

Andy

T.C.

A bit confused with your question? Can you explain a little?

reader

ACServices wrote: »

Hi,

Am I right in saying that on a basic tax calculation for self assessment if someone earned a profit of circa £8.9k
they would pay tax and class 4 of circa £450 this is for the yr 2011/12
or would this be more/less due to them earning paye gross of £3.9k and paid tax of 330 before becoming self employed.
All class 2 is paid.

Thanks for the assistance.

Regards

Andy

Gross income = Salary + Profits = £3,900 + £8,900 = £12,800
Taxable income = Gross income - Personal allowance = £12,800 - £7,475 = £5,325
Income tax at 20% on taxable income = £5,325 x 20% = £1,065
Tax Due = Tax liability - Tax deducted at source = £1,065 - £330 = £735 payable by 31/01/2013

Class 4 National Insurance @ 9% on profits above £7,225 therefore:
(£8,900 - £7,225) x 9% = £151 payable by 31/01/2013

Therefore total payable by 31/01/2013 = Income Tax + National Insurance = £735 + £151 = £886*

*No payments on account are required as tax due (£735) is less than £1,000.