Discuss Self Employment is it what it used to be ? in the Electricians Chat - Off Topic Chat area at ElectriciansForums.net

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Jimmy Boy

Electrician's Arms
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Many many moons ago I used to be self employed, back then it seemed to be a breeze looking at the NI contribution tables it seems you get hammered now... As well as paying tax on your profits you get collared on the NI, OK fair enough you pay bugger all on the Class 1's..Perhaps being a one man band isn't what it once was ? Couple this with silly cut throat rates..you guys are really up against it !
J



If you're self-employed you pay Class 2 and Class 4 National Insurance contributions. The rates are:

  • Class 2 National Insurance contributions are paid at a flat rate of £2.65 a week
  • Class 4 National Insurance contributions are paid as a percentage of your annual taxable profits - 9 per cent on profits between £7,605 and £42,475, and a further 2 per cent on profits over that amount
 

Murdoch

Regular EF Member
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Woking
The rates are broadly in line with what employees pay. NI increased under the last Government because they promised not to increase tax and "obviously" NI isn't a tax in their eyes or minds.

Yes we are up against it BUT I prefer it rather than having to worry about being laid off by an employer all the time.
 
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Jimmy Boy

Jimmy Boy

Electrician's Arms
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1,281
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Lounge
I have just had a butchers at the tax rates as well for PAYE they are crafty fookers not only has NI gone up by 1% they have lowered the lower threshold for the 40% so more money to find...I'm off to nut the Lounge wall.ggrr.

Rate
2010-11
2011-12
2012-13
Starting rate for savings: 10%*
£0-£2,440
£0-£2,560
£0-£2,710
Basic rate: 20%
£0-£37,400
£0-£35,000
£0-£34,370
Higher rate: 40%
£37,401-£150,000
£35,001-£150,000
£34,371-£150,000
Additional rate: 50%
Over £150,000
Over £150,000
Over £150,000
 

Murdoch

Regular EF Member
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26,648
Location
Woking
The answer for Sole Traders, is once you get to £30K net profit is to go limited, then you can get more creative!
 
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Jimmy Boy

Jimmy Boy

Electrician's Arms
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Is that the crack is it ? do tell more ! I thought they had cracked down on that as well
J
 

Murdoch

Regular EF Member
Messages
26,648
Location
Woking
Is that the crack is it ? do tell more ! I thought they had cracked down on that as well


J
Its what my accountant told me last week!

Do you have an accountant?
 
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Jimmy Boy

Jimmy Boy

Electrician's Arms
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1,281
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No mate I don't need one, as I am PAYE the reason I brought this up that I look at how much I pay on NI and tax each month + fuel costs and was thinking about going SE on a contract with the employer.
J
 
A

alarm man

dont they calc the 40% per month ie £34371 divided by 12 =£2864.25 then over that its 40% ? im paye and dont have a clue how they do it.they take it one way or another
 

Murdoch

Regular EF Member
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Woking
dont they calc the 40% per month ie £34371 divided by 12 =£2864.25 then over that its 40% ? im paye and dont have a clue how they do it.they take it one way or another
In a word they don't divide £34371 by 12 and multiply by 40%, its not that simple.

Do you know what your tax code is? That's the first step in understanding your PAYE tax bill.
 

netblindpaul

Mentor
Electrician's Arms
Trainee Access
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2,002
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South Wales
Go Ltd. it is better for you & unless most of your business is domestic go VAT Reg'd as well, you will be better off.
 
A

alarm man

In a word they don't divide £34371 by 12 and multiply by 40%, its not that simple.

Do you know what your tax code is? That's the first step in understanding your PAYE tax bill.
its on my payslip
 
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