Self Assessment figures not adding up?

primrose_primrose

Hello,

This is my first post and i'm a bit stumped by my self assessment tax return for 2010/11 and was hoping someone could point out where I've gone wrong. Your help would be much appreciated!

I have a total income of £13,112 with £4,497 of taxable expenditure, leaving me with a grand total of £8,615 to be taxed. I was under the impression that the first £7,000 was tax free and after that was taxed at 20%. 20% of £1,615 is £323, but at the end of the process there asking me for £965. Why???:(

PlutoinCapricorn

1) You are talking about 2010-2011: the Personal Allowance was £6,475.

£7,475 applies to 2011-12.

2) Have you heard of the Class 4 levy?

PlutoinCapricorn

You also need to consider Payments on Account: this together with the Class 4 NI could explain the difference. Was this your first year of self employment or did you file for 2009-10?

dori2o

Is the only income you have self employed income as the figures really don't add up.

As I see it

Tax due = 8615 - 6475 = 2140 x 20% = £428

Class 4 National Insurance = 8615 - 5715 = 2900 x 8% = £232

Total Tax and Class 4 NI due = £660.

Payments on account would not be due as the balance is less than £1000, and even so the amount due.

OP can you post up the details of the whole calculation?

primrose_primrose

Hello chaps, thanks for your input so far, it's very much appreciated!

So in answer to your questions - this will be the third return that i've filed to date. I was employed during that year and earned £1,524 from the employment and no tax was deducted from this sum. My tax code for the employment was 647L. I also pay £2.40 every week by D/D for national insurance.

Does that all add up?!

Pennywise

primrose_primrose wrote: »

Hello chaps, thanks for your input so far, it's very much appreciated!

So in answer to your questions - this will be the third return that i've filed to date. I was employed during that year and earned £1,524 from the employment and no tax was deducted from this sum. My tax code for the employment was 647L. I also pay £2.40 every week by D/D for national insurance.

Does that all add up?!

Yes, that's now spot on. You owe £965 in tax and class 4 NIC based on the combined income from s/e and employment.

heretolearn_2

Did the 13,112 include that employment income or not? If not, You are forgetting that your income from the employment is also taxable. It isn't taxed through the PAYE because on it's own you are under the tax free allowance. But now you've got additional income as well from your self employment, you total income is what is taken into account.

So you have your employment income + your business profit - your personal allowance = your taxable income.

primrose_primrose

yes the 13, 112 was the inclusive figure. thanks for your help.