For years, I have set aside a percentage of my income for tax, regardless of deductible costs. For my current financial year, I want to estimate it more accurately after deducting costs, but cannot reconcile my figures for the NI with the figures on my accountant's app.
On the accountant's app, I enter my income pre-tax and the app calculates the tax liability. I could rely on that but I want to understand how it's arrived at in the context of the NI.
As I understand:
Class 2, £3.05 * 52 weeks = £158.60
Class 4, £9500 at 2% = £190
For the remainder of Class 4, do I (A) deduct £190.00 from the taxable income then multiply the result by 9% or (B) deduct £190.00+£158.60 from the taxable income then multiply the result by 9%?
Or what?
tia
Bnc
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Class 2 and Class 4 NI
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- Lemon Quarter
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Re: Class 2 and Class 4 NI
The Class 4 is 9% on profits between £9,501 and £50,000, plus 2% on the excess of profits over £50,000. E.g. on profits of £59,500, it's:
(50,000-9,500) x 9% + (59,500-50,000) x 2% = £3,645 + £190 = £3,835.
Is your self employment income your only earnings, in other words, you don't also have employment income?
(50,000-9,500) x 9% + (59,500-50,000) x 2% = £3,645 + £190 = £3,835.
Is your self employment income your only earnings, in other words, you don't also have employment income?
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