Skip to main content

This is a new service – your feedback will help us to improve it.

Posted Fri, 26 Apr 2024 06:58:31 GMT by Frank
Hi, I'm a bit confused as to why I paid 20% on a £7,001 profit for 2022-2023. This is what I inputted into the online self-assessment system. Income: £32,818.84 Deductions: -£13,246.04 Profit: £19,572.80 Personal Allowance: £12,570.00 Taxable Net Profit: £7,002.80 This is the online calculations the HRMC website provided. Profit from self-employment: £19,571.00 minus Personal Allowance: £12,570.00 Total income on which tax is due: £7,001.00 £7,001.00 x 20% = £1,400.20 Income Tax due = £1,400.20 plus Class 4 National Insurance contributions: £7,663.00 x 9.73% = £745.60 plus Class 2 National Insurance contributions: £138.60 Total Class 2 and Class 4 National Insurance contributions due: £884.20 I paid the 2022-2023 income tax but when I used this HRMC estimator, https://www.gov.uk/self-employed-tax-calculator it states that I won't owe any income tax based on my net profit of about £9,000 for 2023-2024. Thank you for your help. Frank

[Display name amended - Admin]
Posted Fri, 03 May 2024 09:57:23 GMT by HMRC Admin 25 Response
Hi Frank,
Tax is due on anything over your personal tax allowance of £12570.
You have stated you entered a net profit of £9000 which indicates this is your turnover minus expenses and as such is below the personal allowance and no tax would be due.
You need to enter the profit prior to deducting perosnal allowances.
Thank you. 
Posted Fri, 03 May 2024 14:49:07 GMT by Frank
I used the HRMC online self-assessment tax reporting system which guided me step-by-step. I entered my income and deductions when it prompted me to do so. How the heck did it flip something around so drastically? I contact HRMC for a review.

You must be signed in to post in this forum.