Good Afternoon All, After recently qualifying as a bookkeeper, I'm know delving into the realms of personal tax returns for some family members to practice on ! Please can someone advise if the Class 4 NIC's (8% of profits between £ 5715 & £ 43875) are based on profits before or after the personal allowance has been deducted ?
I would assume it's calculated after the personal allowance but I can't find anything which confirms this !
So they are just confusing me when it says 'taxable profits' !! Why can't they speak simple like the rest of us (especially me) !
So a self employed person with net profits of £ 8, 785 (before personal allowance deducted) would have to pay the following Class 4 NI's :
8785 - 5715 = 3070 x 8% = £ 245.60
Is this correct ? Lisa
but beware that taxable profits and net profits need not be the same figrue.
If someone is refering to net profits I would have said they are generally referring to the accounts or some other such statement. If referring to taxable profits this will be after tax computation adjustments applied to the net profits such as capital allowances etc.
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Forgive the typo's I generally do not proof read. Just lazy I guess!
