working out tax scales???

dandare

hi just looking for a quick bit of advice, i would like to work out how much tax i have to pay, using an accountant for the real stuff, but i'd like to get a bit of a handle on it for myself.
when i look at the hmrc website it says:
personal allowance 06/07 £5225
0 - 2150 @10%
2151 - 33300 @22%
so if i earn £10000 gross as a s/e photographer, my job.
do i pay no tax on the 1st £5225, 10% on the next 2150 and 22% on the remainder or is it 22% on the £10000?
ta

nomoneytoday

You will pay no tax on the 1st £5225, 10% on the next 2150 and 22% on the remainder.
(£792)

nomoneytoday

You will pay no tax on the 1st £5225, 10% on the next 2150 and 22% on the remainder.
(£792)

oldwiring

Basically , yes. You will also pay National Insurance. This kicks in at abut the same levle as the personal allowance and for most rmploted folk is 11%. Self emplyed pay a flat £2.10 p.wk (Class 2)and 8% on profits above £5225 p.a (Class4). Self employed eanings below £4635 are excused Class 2 contributions.

The above are rates for 2007/08.

lizzyb1812

Actually you could pay less

Your post said that your £10,000 was gross. You are allowed to deduct business expenses from the gross to get to your net profit. I imagine in your case this would include the cost of equipment, printing photos, travel, stationery etc

lizzyb

oldwiring

lizzyb1812 wrote:

Actually you could pay less

Your post said that your £10,000 was gross. You are allowed to deduct business expenses from the gross to get to your net profit. I imagine in your case this would include the cost of equipment, printing photos, travel, stationery etc

lizzyb

Thanks L. I should have written net profit:D

dandare

thanks for all the replies folks.
i thought that was the case.
the £10000 i mention is £10000 gross profit?? i'm not up to speed with the terminology, but with expenses etc deducted.
Ni was set up dd at the start so that takes care of itself i hope.

Hoddie_2

Ni was set up dd at the start so that takes care of itself i hope.

Sounds like you're talking of the £2.10/week Class II that is payable monthly/quarterly. This is payable regardless of your profit but self-employed people also have to pay Class IV NIC which is dependent on your profit. It is in addition to tax.

dandare

ahhh i sewe, so whats the scale for paying ni with ergards to profits made as i may have more to pay now??

dandare

sorry for the spelling

lizzyb1812

Look at post 4 above where old wiring gives you the figures

lizzyb