Class 2 NIC self employed

Rtj123

Oops sorted, realised I need to enter £1000 into the trading allowance box not the £232. Tax bill now reduced to £398

[Deleted User]

That is correct!

Rtj123

[Deleted User] said:

That is correct!

Thankyou for your help. I owe you a virtual MSE pint!

Bookworm105

Rtj123 said:

Dazed_and_C0nfused said:

Rtj123 said:

[Deleted User] said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Basically yes.  You can either claim actual expenses or the trading allowance, not both.

https://www.litrg.org.uk/working/self-employment/trading-allowance

I have removed the allowable expenses and instead entered £232 into the trading allowance box. However when I get to the end my tax bill is still showing as £621. How do I get the payment reduced?

that is still wrong. The trading allowance (TA) is a fixed £1,000 "expenses" which you have the choice to either claim that as a fixed total or claim your actual costs. Patently if actual <1,000 you are better off claiming TA instead (but you cannot use it to create an overall loss position) 
please read the background: Tax-free allowances on property and trading income - GOV.UK

the please read the notes on how to fill in your tax return: SA103F Notes 2024
or if doing the short from (link given above by others) then read the notes for that: Self-employment (short) notes

14,356 gross incomes less 1,000 TA = 13,356 taxable profit less PA 12,570 = 786 net taxable income x 20% income tax = 157.20

For 23/24 Class 2 NI was still payable if your gross profits were more than 12,570. Yours are so you have to pay it: 52 weeks x 3.45/wk = 170.40
For 23/24 Class 4 NI was payable at 9% on profit above the "lower profits limit" of 12,570 - so in your case 786 x 9% =  70.74

Your total tax bill should therefore be around £398

[Deleted User]

Bookworm105 said:

Rtj123 said:

Dazed_and_C0nfused said:

Rtj123 said:

[Deleted User] said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Basically yes.  You can either claim actual expenses or the trading allowance, not both.

https://www.litrg.org.uk/working/self-employment/trading-allowance

I have removed the allowable expenses and instead entered £232 into the trading allowance box. However when I get to the end my tax bill is still showing as £621. How do I get the payment reduced?

that is still wrong. The trading allowance (TA) is a fixed £1,000 "expenses" which you have the choice to either claim that as a fixed total or claim your actual costs. Patently if actual <1,000 you are better off claiming TA instead (but you cannot use it to create an overall loss position) 
please read the background: Tax-free allowances on property and trading income - GOV.UK

the please read the notes on how to fill in your tax return: SA103F Notes 2024
or if doing the short from (link given above by others) then read the notes for that: Self-employment (short) notes

The op amended the entry to £1000 in a later post. 

Rtj123

Bookworm105 said:

Rtj123 said:

Dazed_and_C0nfused said:

Rtj123 said:

[Deleted User] said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Basically yes.  You can either claim actual expenses or the trading allowance, not both.

https://www.litrg.org.uk/working/self-employment/trading-allowance

I have removed the allowable expenses and instead entered £232 into the trading allowance box. However when I get to the end my tax bill is still showing as £621. How do I get the payment reduced?

that is still wrong. The trading allowance (TA) is a fixed £1,000 "expenses" which you have the choice to either claim that as a fixed total or claim your actual costs. Patently if actual <1,000 you are better off claiming TA instead (but you cannot use it to create an overall loss position) 
please read the background: Tax-free allowances on property and trading income - GOV.UK

the please read the notes on how to fill in your tax return: SA103F Notes 2024
or if doing the short from (link given above by others) then read the notes for that: Self-employment (short) notes

14,356 gross incomes less 1,000 TA = 13,356 taxable profit less PA 12,570 = 786 net taxable income x 20% income tax = 157.20

For 23/24 Class 2 NI was still payable if your gross profits were more than 12,570. Yours are so you have to pay it: 52 weeks x 3.45/wk = 170.40
For 23/24 Class 4 NI was payable at 9% on profit above the "lower profits limit" of 12,570 - so in your case 786 x 9% =  70.74

Your total tax bill should therefore be around £398

Thanks. Yes I realised that was incorrect. I entered £1000 into the trading allowance box and I have paid £398 in total tax including class 2 NIC 

Bookworm105

Rtj123 said:

Bookworm105 said:

Rtj123 said:

Dazed_and_C0nfused said:

Rtj123 said:

[Deleted User] said:

InMyDreams said:

Dazed_and_C0nfused said:

Also, is there any reason you haven't claimed the trading allowance instead of actual expenses?

This was my first thought too reading the OP.

Yes - I actually worked this out earlier but forgot to mention this in the fog! 

Liability would reduce liability to £217.50, plus Class 2 of course 🙂

Please could you explain this? Would it be a case of deleting the £232 in the expenses box and putting else?

Basically yes.  You can either claim actual expenses or the trading allowance, not both.

https://www.litrg.org.uk/working/self-employment/trading-allowance

I have removed the allowable expenses and instead entered £232 into the trading allowance box. However when I get to the end my tax bill is still showing as £621. How do I get the payment reduced?

that is still wrong. The trading allowance (TA) is a fixed £1,000 "expenses" which you have the choice to either claim that as a fixed total or claim your actual costs. Patently if actual <1,000 you are better off claiming TA instead (but you cannot use it to create an overall loss position) 
please read the background: Tax-free allowances on property and trading income - GOV.UK

the please read the notes on how to fill in your tax return: SA103F Notes 2024
or if doing the short from (link given above by others) then read the notes for that: Self-employment (short) notes

14,356 gross incomes less 1,000 TA = 13,356 taxable profit less PA 12,570 = 786 net taxable income x 20% income tax = 157.20

For 23/24 Class 2 NI was still payable if your gross profits were more than 12,570. Yours are so you have to pay it: 52 weeks x 3.45/wk = 170.40
For 23/24 Class 4 NI was payable at 9% on profit above the "lower profits limit" of 12,570 - so in your case 786 x 9% =  70.74

Your total tax bill should therefore be around £398

Thanks. Yes I realised that was incorrect. I entered £1000 into the trading allowance box and I have paid £398 in total tax including class 2 NIC 

oops, yes I failed to notice there was page 3 before responding. At least my total agrees with yours