Hi Jay
Just want to check something - you say 'income' for a sole trader. Is the £40k income or (adjusted) profits? Not checked the tax element as I didnt get past the two NI lines as they are both out. Can you explain your workings for both of them. Hint dont forget the bandings!
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
you've got about two mins to spot your error before I tell you what it is.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
You calculated 9% on turnover, not on adjusted turnover (no class 4 on the first £8,060).
Here you go :
Adjusted profit £40k minus Personal allowance of £11k leaves £29k taxable at 20% so £5800 as you correctly identified.
Class 2 of £2.80 per week giving £145.60 for the year as noted by Julie and hinted at by Joanne
Class 4 is where you came off the rails. £40k - £8,060 * 9% is £2874.60
So, overall deductions are £8820.20 leaving £31,179.80 take home.
Ta dah.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
