[Closed] Income tax calculation?

Contact the Inland Revenue Ni is also paid at 8% on profits you need to tell him you are going self employed anyway.They are actually very helpful

I may need to be self employed for the first 3 months of the next financial year, before going into a salaried position. How do I work out how much tax i'll need to pay?
Also NI payments are £2.40 per week currently, yes?

You should really speak to an accountant - even at £100 per month for 3 months, I'd be very surprised if they didn't manage to save you money.

if you are going to earn less than just over £6k no imcome tax will be payable, although all of your subsequent employed income will be taxed at 20%. NI does not have to be paid if you are self employed, but you can pay voluntary contributions.

If you are going to earn more than this it may be worth setting your own company up, (cost about £200 through accountant) and you can take income as above, with any excess taken as dividends. You will pay no tax on the salary or dividends, but corporation tax will be payable at 21% on the profits, but you should still be better off. An accountant could advise appropriately and this advice should be sought.

Hope this helps.

Thanks everyone!

The first thing you need to do is register self employed with [url= http://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.htm ][b]HMRC [/b][/url], this will ensure you don't get a penalty for late registration & will also ensure that you get sent the details to pay the correct self employed Class 2 National Insurance.

You will also need to keep a record of all the income you earn & the business expenses that you incur so that you can complete your 2010/11 Tax Return which will get sent to you on/after 6th April 2011. Any Tax &/or Class 4 National Insurance due for 2010/11 will then be due to be paid by 31st January 2012. It maybe as well to make a contingency for this by putting sufficient money into an account & not spending it on shiny things for your bike 🙂

I hope this helps.