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Post Info TOPIC: Taxed Earnings & Limits
Suffolker


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Taxed Earnings & Limits
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I was just wondering about the following; lets say a self employed person has income of 23,000 and outgoings of 13,000, the tax free earnings for last year was 6,035 does that mean the person would be taxed on everything over the 6,035 and up to the 23,000 OR is it a case of because they made 10,000 profit for that year then they are taxed on the 3,965 (whats left of the 10,000 after the tax free amount)?  Hope you get what I mean

Many Thanks

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semsley


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Provided the 'outgoings' were legitimate business expenditure then they would be taxed on the profit less tax personal allowance (provided they had no other job), but there would also be class 4 NI to pay.

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Advice from beyond the grave!!!

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BackOfficeGroup


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Taxed on 3965 at 20%
NI on 4565 at 8%

I'm taking it thats its 2008/09 for those figures.

P

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Suffolker


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Thats great thanks for your replies :)

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