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Can anyone help me understand and confirm whether this HMRC calculation is accurate ?
CD31
Posts: 20 Forumite
in Cutting tax
Hi everyone. To cut a long story short I’m filling out my return for 2020-21 and for that period I earned £18,403.79 and had expenses of £6,766.68. HMRC did the calculation and deducted that to make it £11,636.
As I was filling out the return it told me the calculation at the end and that I had to pay £350.84.
I thought you could earn £12,500 without having to pay any tax or NIC and that NIC was voluntary up to that figure?. Looking back earlier in the return it said I could voluntarily pay NIC contributions which would be £158 but on the option where I clicked “yes” to voluntary contributions it said that wasn’t possible as my profits were above £6475 so I had to select “No”
So where has the other £192 come from that I’ve got to pay?, is the extra payment of £192 required because my profits have exceeded £6475?
As I was filling out the return it told me the calculation at the end and that I had to pay £350.84.
I thought you could earn £12,500 without having to pay any tax or NIC and that NIC was voluntary up to that figure?. Looking back earlier in the return it said I could voluntarily pay NIC contributions which would be £158 but on the option where I clicked “yes” to voluntary contributions it said that wasn’t possible as my profits were above £6475 so I had to select “No”
So where has the other £192 come from that I’ve got to pay?, is the extra payment of £192 required because my profits have exceeded £6475?
0
Comments
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Is the total due a combination of Class 2 and Class 4 National Insurance?
The limits for each of those are different and are also different to the (income tax) Personal Allowance.
https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed1 -
Hello!, I’m guessing it must be a combination of both Class 2 and 4 however I just assumed that because my earnings after deductions were below the personal allowance of £12,500 that I’d only have to pay voluntary class 2…Dazed_and_C0nfused said:Is the total due a combination of Class 2 and Class 4 National Insurance?
The limits for each of those are different and are also different to the (income tax) Personal Allowance.
https://www.litrg.org.uk/tax-guides/self-employment/what-national-insurance-do-i-pay-if-i-am-self-employed0 -
CD31 said:I thought you could earn £12,500 without having to pay any tax or NIC and that NIC was voluntary up to that figure?.£12,500 is the standard personal allowance for Income Tax for 20-21.The NI thresholds are lower - £9,500 for class 4 NI for 20-21 and £6,475 for class 2
1 -
£11,636 - £9,500 at 9% = £192.24 class 4 NIC
£158.60 class 2 NIC. Total due £350.84.0
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