Unexpected bill for Class 4 contributions for 2011-2012.. can anyone help?

cotswoldaccountant

It is useful to remember that you only have one personal allowance - i.e. income that you don't pay tax on. For 2011-12 the personal allowance was £7,475, so anything you earned over that amount would be taxed. As you have a PAYE job earning more than the allowance, you have already used up (and received the benefit of) the allowance in your full time job. So anything you earn from self-employment will be taxable at 20% as long as you remain within the basic rate tax band.

It would be nice if there was a separate personal allowance for each separate type of income, but sadly this is not the case!

mickym

thank you all!

susiedee_2

I too have just completed my tax return for my small jewellery business. I had losses of £2229.00 with a total business income of £455.00 (a bad year). The calculation has said I need to pay £158.40 NIC4 and student loan. I have never been a student. I don't understand how they've come up with this figure, any ideas anyone?

mickym

Hi Susie.

I was confused by this at first, but apparently the line:

Total tax, Class 4 NIC and Student loan due for 2011-12 £***.**

This is a default line of text that labels the required amount of you need to pay.

You may be exempt (or not earn enough) for Class 4, and have no student loans.... but the line also specifies 'Tax'.

Which is the element you need to pay.

This confused me.

Im pretty sure that this is the case, and happy to be corrected if not.

sunshinetours

mickym wrote: »

Tax return first timer here.

In the year 2011-2012 I earned £31499 in my Full time job (PAYE).... and earned £1899 in some freelance work.

Dont have any other income from shares, big savings, property etc, and didnt have any expenses to claim.

Yet at the end of my return I am being asked to pay £380 for

'Class 4 NIC and Student loan due for 2011-12'

Looking here:

http://www.hmrc.gov.uk/working/intro/class4.htm

which states




I only earned a profit from my freelancing of £1899... so why do i need to pay? I remember talking to a HMRC representative when i started freelancing and they said if i was only earning a few thousand from freelancing I wouldnt have to pay Class 4.

During filling out the Online Tax Return process I selected that I WASNT exempt from Class 4 as I didnt meet the requirements in their Help Pop Up Window that stated:




Can someone please advise me?

Many Thanks

I am guessing the £380 will be your total Tax, Class 4 and Student loan bill for 11/12?

EDIT - grr read to the end of the thread before replying - school-boy error! Glad you are sorted - this catches a few people out!

System

susiedee wrote: »

I too have just completed my tax return for my small jewellery business. I had losses of £2229.00 with a total business income of £455.00 (a bad year). The calculation has said I need to pay £158.40 NIC4 and student loan. I have never been a student. I don't understand how they've come up with this figure, any ideas anyone?

What other income did you have in the year?

agrinnall

susiedee wrote: »

I too have just completed my tax return for my small jewellery business. I had losses of £2229.00 with a total business income of £455.00 (a bad year). The calculation has said I need to pay £158.40 NIC4 and student loan. I have never been a student. I don't understand how they've come up with this figure, any ideas anyone?

Susie, you have now posted this in at least 2 threads, you should really have started your own thread but having decided to piggyback on someone elses please can you restrict it to just one.

http://forums.moneysavingexpert.com/showpost.php?p=58603059&postcount=9