A couple of SA questions.

rssteve

06-07 in my employed job i earnt 29,129. I had tax code of 503L.

I also had interest of 1562 which i was taxed on at 20%.

Im also registered as self employeed. What amount could i have earnt before i have to pay 40% tax on my self employment?

Starting rate 10%

0 - 2,150


Basic rate 22%

2,151 - 33,300

Am i right in thinking that my savings interest does not effect me hitting the 40% bracket, or does it?

i calculate 5030 + 33300 = 38330 is what income before i hit the 40%, or do i have to incldue my 1500 interest from savings in there? so 36830?

Also what will happen to my class 4 NI as i havn't been paying any as far as i am aware, just the class 2? £2.20 a week etc.

jem16

rssteve wrote: »

06-07 in my employed job i earnt 29,129. I had tax code of 503L.

I also had interest of 1562 which i was taxed on at 20%.

Was this gross interest or net interest?

Im also registered as self employeed. What amount could i have earnt before i have to pay 40% tax on my self employment?

Starting rate 10%

0 - 2,150


Basic rate 22%

2,151 - 33,300

Am i right in thinking that my savings interest does not effect me hitting the 40% bracket, or does it?

Your savings interest is part of your taxable income so you do have to take this into account. However with the figures you quoted above you are not in the 40% bracket yet.

i calculate 5030 + 33300 = 38330 is what income before i hit the 40%, or do i have to incldue my 1500 interest from savings in there? so 36830?

You are correct in the first part except it's £5035 + £33,300 so £38,335. You must include gross interest so yes you should deduct that from your calculations.

Also what will happen to my class 4 NI as i havn't been paying any as far as i am aware, just the class 2? £2.20 a week etc.

Don't know about NI sorry.

rssteve

yes the 1562 was gross.

thanks for pointing out its actually 5035.

I know know that I can earn 7644 ontop until i have to start paying 40%.

thanks

rssteve

ok all done now. it appears class 4 NI is only calculated on the self employed income. the first 5035 is not chargeable, then the rest up until the 30s are at 8%. So if your employed took you to 30k ish, then add on your self employed and most of it would be charged at 40% tax, plus 8% NI. :eek:

Debt_Free_Chick

rssteve wrote: »

ok all done now. it appears class 4 NI is only calculated on the self employed income. the first 5035 is not chargeable, then the rest up until the 30s are at 8%. So if your employed took you to 30k ish, then add on your self employed and most of it would be charged at 40% tax, plus 8% NI. :eek:

Class 4 is on profit .... could be quite a difference for some people, between SE income & profit

Also, there's anannual maximum for NI - which you are likely to exceed if you earn more than the Upper Earnings Limit in an employed position, but you also pay class 2 and, if applicable, class 4 NIC on SE income.

If you think it's likely that you will exceed the Annual Maximum, you can apply to defer (some of) your NI. If you don't, and exceed the Annual Maximum, you'll need to apply for a refund. Good news is that they're pretty efficient at paying any refund