Tax Question

[aaclapham]

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Honest I have read and reread all I can but as a Sole Trader I will probably declare £1000 profit - what rate of tax will I be charged?

Thanks.
Andrew.

[purple]

Obviously I would recommend you get financial advice.

However what tax rate you pay depends on what other income you also have, if other income puts you in high tax bracket then this income will also be charged at 40%

[Frostie]

If you have a normal tax code (4895) then it will work out something like;

The first £4895 is tax free
The next £2,090 you pay 10% tax
The next £30,800 you pay 22% tax
Anything still left in your pocket, you pay 40% tax on

As has been said GET ADVICE, the above figures are based on my self assesment last week, but should give you an idea as to where you would fit in depending on your OVERALL income for the year.

[The Ferryman]

Don't forget, you may also have class 4 national insurance contributions, on top of the tax, depending on your earnings and any other employment, as well as the class 1 or 2 contributions you are already paying.

[hrbs]

Hi

If you have declared £1k as your sole trader profit, you won't pay class 4 NIC, but you should have been paying class 2 since you registered as self employed.
You may be able to claim exemption/deferment of NIC - see here http://www.hmrc.gov.uk/nic/class2.htm and http://www.hmrc.gov.uk/rates/nic.htm

Check out my other posts on this forum for more details/links.

Regards

Keith
HRBS
Small Business Specialists

[aaclapham]

thanks for the advice

[SimonDance]

Thanks for that.... was meaning to ask to.