Me again, another day and another stupid question! I realise that class 2 NICs are not deductible for tax purposes and have always assigned them to drawings as they are classed as a personal expense, however, if they are included in the drawings figure when it comes to completing a tax return, then surely they will be subject to tax? Should the assignment of class 2 NICs go somewhere else (maybe against cap int) or am I to be taxed once in the form of class 2 NICs and taxed on them again at a rate of 20% if they are correctly assigned to the drawings figure?
Again, my apologies for asking such simple and basic accounting questions. Any help is appreciated so thank you in advance.
Class 2 shouldn't touch the accounts as they are a personal expense of the proprietor. If the business has paid the NI then this is rightly allocated to drawings and taxed accordingly.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
