NI on top of tax payment!

[HomefromHome]

this could just be me not knowing this but....

i was just over the £6k tax band and knew i would have to pay about a £100 in tax this year... what i didnt know was that i also have to pay £88 NI as well as that!!!! I (obviously naivly) thought as i was paying a monthly NI contribution i wouldnt be paying more - after speaking to someone at the tax office, they explained they were different classes of tax - the monthly one was class 2 and the one i've got the bill for with my tax is class 4.

did anyone else (who is relatively new ish) know this??? i've been minding 3 yrs and this is the first time i've had to pay tax, but i didnt know about the NI part it. i was never told about this before.

anyhoo as i am so annoyed about this i've decided they're not getting their money til 3 days before it's due!!!!! (jan 31st) it can earn interst for me rather than them!:D

[Minstrel]

Hello!

I did know about it only because the guy on the phone explained it all when i reg'd as self employed. Its because the class 2 is the same contribution all the time whereas the class 4 NI is based on your profit for the year and you pay 8% of everything over the NI limit (which is different than the tax threshold but i cant remember exactly what it is).

:D

[HomefromHome]

yes! th ni threshold is a little lower than the tax one, so that needs to be watched by those trying to keep below the tax threshold!

blimmin nightmare!

[Minstrel]

I dont expect to pay anything at all this year (starting minding at beginning of sept and have all start up costs) but i keep promising myself that i will put some side 'just in case'. I'm yet to do that though as i keep spending it all! whoops!

[HomefromHome]

lol! i didnt need to for the first 2 yrs as only had part timers.

if you know you wont be over in april then dont bother saving! enjoy it!

then start saving from april:( lol!

[madasahatter]

The other big one to watch out for is when your tax bill goes over £500 because the IR then insist you pay the next years tax 'on account'. They estimate that your next tax bill will be the same and split it into 2 payments one due by 31st Jan of the tax year you are in and the 2nd payment by 31st July.
This got me a few years ago. I submitted my self assessment at the end of Jan and immediately had to pay my £900 tax bill plus another £450 'on account' for the current tax year.
It can all be a bit mind blowing!

[Chatterbox Childcare]

I got caught with this 2 years ago - we have to pay our taxes but look on the plus side - you have to earn it to pay it!