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The Book-keepers Forum (UK) -> VAT, Payroll & Tax -> HELP PLEASE - SUB POSTMASTER AND CLASS 4 NIC
Post Info TOPIC: HELP PLEASE - SUB POSTMASTER AND CLASS 4 NIC
kismetkaz


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HELP PLEASE - SUB POSTMASTER AND CLASS 4 NIC
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Any help appreciated on this - I have just started acting for a post office.  as they also run a shop, the salary is treated as trading income.  The post master receives a P60 with the total income on, which includes commission etc.  Class 1 NIC totals £1752.61, which I take to be 11% on £15932 which is earnings above the ET up to the UAP. 

I have made a monumental error and sent the tax calculations to the client without realising that I should take the salary out of the class 4 calculation for the post mistress.  Can anybody confirm that what I need to do is this:

remove the £15932 from her net profit, then calculate class 4.  Her husband is liable to class 4 on all of his SE income as he did not pay any class 1.

Thanks for any help I receive



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Don Tax


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This always struck me as strange -- treated as self employed for tax and employed for national insurance. Have a read of this and come back to us.

http://www.hmrc.gov.uk/manuals/nimmanual/NIM24625.htm

best wishes




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kismetkaz


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Hi, thanks, yes I have that in front of me and I think thats what its saying I should do, but sometimes HMRC are difficult to understand so I want to make sure that Im not reading it wrong!   I think if I take the amount she has paid class 1 on, off her net profit, then do class 4, it will be ok. 



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Don Tax


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Yes, so if it's a partnership, one partner pays Class 4 on a share £15932 PAYE income.   Very strange.

Wonder if it's worth looking into whether a partnership is the best structure.  Anyway, at least the client will have a bit of good news.



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