Quick question about higher tax levels

smiddy_2

Hi i am a trader with a high turnover of around 100k per year. Now, out of that i probably spend 75k on stock so even though my gross income is 100k my net is only 25k. Does this still mean i am a higher rate tax payer? Sounds a strange question to ask but i am unsure about this one. Thanks in advance.

CLAPTON

No

you are taxed on your profit and not your turnover

so profit = turnover minus your costs: which include stock but also other costs maybe rent, utilities, staff, transport etc depending upon your business.

smiddy_2

Thanks, just as i thought but glad to clear it up.