Please help me. Income tax emergency

christopherjk

Heya,

Long story short, for the 2007/2008 year I earned £7983.60 as self employed.

My only income, yet they want me to pay £839.70!!!!:eek:

Total tax, Class 4 NIC and Student loan due for 2007-08: £559.80
First payment on account for 2008-09: £279.90

I work for AQA. Why are the government doing this like this? I am really stressed out.

Cook_County

Is this your turnover or your net profit after expenses and capital allowances?

Did you have any other income?

mike1950

It looks about right to me.Suggest you read up about the payment on account on the Revenue website.

Unfortunately you managed to earn too much.
Welcome to self employment.

christopherjk

This was my only income.

AQA researchers are classed as self employed. So this is all very confusing for me. I hate this. I simply don't have enough to pay for this bill now.

Ian_W

Why are the government doing this like this?

Simple answer - cos they do it like this for everyone who is self-employed. Don't mean to sound harsh but you should have realised that some of the money you trousered could be liable for tax. Personal tax allowance for 07/08 earnings was £5225, so profits above that would be liable to tax.

In respect of the 2008/9 HMRC assume you'll earn at least the same and expect you to pay the tax in 2 instalments. Though you can pay less if you expect less earnings, but can be charged interest if you underestimate this.
It is more advantageous than being employed on PAYE as you get to keep your money longer before the Govt grabs its bit.

Cook_County

If you look back at your business plan you would hopefully have planned for a tax bill & saved appropriately?

Are you claiming working tax credit?

Have you claimed all of the deductible expenses on your tax return (travel, capital allowances, use of home, postage, telephone etc etc??)

hopefulfooluk

christopherjk wrote: »

Heya,

Long story short, for the 2007/2008 year I earned £7983.60 as self employed.

My only income, yet they want me to pay £839.70!!!!:eek:

Total tax, Class 4 NIC and Student loan due for 2007-08: £559.80
First payment on account for 2008-09: £279.90

I work for AQA. Why are the government doing this like this? I am really stressed out.

Sounds about right to me.... (care to swap tax bills? yours is 1/20th of what mine is!!!)

toby_puppy

Dedicated phone number for payment difficulties 01274 539628

Ian_W

hopefulfooluk wrote: »

(care to swap tax bills? yours is 1/20th of what mine is!!!)

Bet the answers YES if you care to swop your earnings!

Treading_Water

If you don't have the funds to pay this all at once, speak to them about installments. They're rates are a lot more favourable than many loans and credit cards.

CLAPTON

The way is works is this

Income is 7983.60
you are allowed 5225 without tax
so that leaves 2758
then the next 2230 is taxed at 10% i.e. 223
so leaving 528 to be taxed at 22% i.e 116
so tax is 223+ 116 = 339

the NI class 4 is 8% above 5225 so thats 8% of 2758 = 220
so total deductions are 559.8

then they ask for a half again toward next year

That's how it works I'm afraid.
I don't understand why people are being so unhelpful here.


In 2008-9 the allowances are a bit different.