National insurance question - please help

soniaclair

Question - profits of two self employed people are as follows

Jon - 24,300
Charlotte - 58,060

using the thresholds - lower limit 8060 and upper 43,000. how have the AAT got the following answers for class 4 national insurance please?

Jon - class 4 @ 9% - 1489.05
Jon - class 4 @ 2%- nil

Charlotte - class 4 @ 9% - 3032.55
Charlotte - class 4 @ 2% - 332.20

I thought you just took the lower limit from the profit and then x by 9% for Jon

Please help!

Eulaliaaaa

Hello, where did you get this question from??

Adele69

I just started BTAX a couple of days ago and this makes no sense. Skimmed through the FA2016 practice assessment and it's not in there.

Bertie

Assuming FA2016

Jon = £1461.60

Charlotte = £3144.60
£301.20

Bertie

You are working to FA2013 with those answers.

For reference:

Jon
24300 - ((1489.05 / 9 ) * 100) = 7755 << FA 2013 lower profits limit.

Charlotte

7755 @ £0
(upper limit (FA2013) £41,450) (41450 - 7755)*9% = £3032.55
Remaining £58,060 - £41,450 = £16,610 * 2% = £332.20

So, I'd buy a new book.

.

Adele69

I liked how you reworked the equation/sum to get the starting threshold @Bertie, wish I'd thought of that. I calculated it with the FA2016 figures and got the answer you did at least. Is there a source for these earlier FA figures?

Bertie

Hi,

Well after doing a bit of reverse engineering it was just a case of looking back through past lower profit limits.

I did remember that circa 12/13 that the figure was 'around' that, but without checking I couldn't be certain.

Maths usually is the answer to these sort of questions. Quite enjoy them.