Self Assessment - CIS / tax free personal allowance

Zebadeediddly

Hi

• Approx earnings £29000
• Approx tax paid (through cis system) £5700
• Approx Expenses £3800

I am self employed and get paid through the cis system so pay 20% on all my earnings each month. 
When I complete my self assessment tax return, even with expenses, it shows I am due back £1600. I was under the impression even those self employed were entitled to £12500 tax free earnings each year. As I have paid 20% on all I have earnt this year, surely i am owed back the tax on the first £12500 earnings at the very least, before we even consider my expenses. Meaning my tax rebate should be a minimum of £2500???
How is the "tax-free personal allowance" accounted for in my scenario?
Many thanks in advance for all your help. 

Dazed_and_C0nfused

Have you factored in National Insurance (both class 2 and 4)?

luke100787

This confused me the first time I didn't take national insurance into account 

[Deleted User]

Tax on £26100 is £2720
Class 4 is £1494
Class 2 £156 or so

Total due approx £4360

oldbikebloke

purdyoaten2 said:

Tax on £26100 

26,100 ?

(gross) income 29,000 less expenses 3,800 = 25,200 profit
profit less personal allowance: 25,200 - 12,500 = 12,700 taxable profit for income tax
income tax 12,700 @ 20% = 2,540
class 4 on profit 25,200 less 8,632 NI threshold = 16,568 x 9% = 1,491
Class 2: 52 weeks @ £3 = 156

net tax position (2540+1491+156) less tax paid 5,700 = 1,513 refund 

https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

[Deleted User]

oldbikebloke said:

purdyoaten2 said:

Tax on £26100 is £2720
Class 4 is £1494
Class 2 £156 or so

Total due approx £4360

26,100 ?

(gross) income 29,000 less expenses 3,800 = 25,200 profit
taxable profit less personal allowance: 25,200 - 12,500 = 12,700
income tax 12,700 @ 20% = 2,540
class 4 on profit 25,200 less 8,632 threshold = 16,568 x 9% = 1,491
Class 2: 52 weeks @ £3 = 156

net tax position (2540+1491+156) less tax paid 5,700 = 1,513 refund 

https://www.gov.uk/government/publications/rates-and-allowances-income-tax/income-tax-rates-and-allowances-current-and-past

https://www.gov.uk/government/publications/rates-and-allowances-national-insurance-contributions/rates-and-allowances-national-insurance-contributions

Ha Ha !No idea why I had expenses of £2800 on my figures. None.

oldbikebloke

purdyoaten2 said:

Ha Ha !No idea why I had expenses of £2800 on my figures. None.

LOL, you would not believe how many times I ran and re-ran the numbers looking for my error to your calculation before deciding no, not me guv