I am doing a book keeping qualification and having problems understanding how this is done when manually calculating the "exact percentag" for NI for Directors. I know that you have to start with the full years amount then work backwards, but how is this done? Can anyone point me in the right direction or advise where I can get advice on this please? HMRC website is not helpful at all.
In terms of exact %, I cannot help too much as I use moneysoft to calculate my payrolls and it does everything automatically (lazy I know - but it does save time, and the software is really cheap)!
What I do know is that if you pay a director to the tax threshold, they will not pay any tax or NI until February of the following year!
I am sure there is a Payroll boffin amongst us on here, sorry I can't be more help.
I think Ross's link is a good one. Yep, page 14 section 39 sounds complicated, but that's the way it's calculated. When you read that section, definitely have an NI table in front of you so you can see the Lower Earnings Limit (LEL), Earnings Thresholds (ET) and the like. It'll make the explanation a little clearer.
Hi Thanks for info, had already looked at this and did not find it very helpful - it seemed rather complicated. It would be good to see some examples of calculations, to find out how it is worked out. Can you give me a web link to what you use, you say it is relatively inexpensive Thanks
Graham Thanks but I found the link rather heavy going, what I need is "live" examples to look at, so that I can see how it works - but thanks for help anyway Regards
