NICs, pensions etc

[libellule]

I am coming to the end of my 2nd tax year of childminding and might actually have made a profit. I have lots of questions!

I have been paying class 2 NICs. Maybe I shouldn't have?
How do I get an idea of how much tax I will pay? What are Class 4 NICs? Is that when you paty more NICs because you have a profit?

I am thinking of other expenses I should be putting in my accounts. Don't do phone bills as seems to time consuming. Any tips?

I will be needing a double buggy from June (solely for minded children). Am looking at one that costs about £350 as I do alot of walking on school runs. Should this be under toys and equipment or Annual Investment Allowance? Does it make a difference anyway?

Should I be paying money into a personal pension plan. Would this be before tax? How does this work when self employed?

Thanks for any answers!

[MrAnchovy]

I am coming to the end of my 2nd tax year of childminding and might actually have made a profit. I have lots of questions!

I have been paying class 2 NICs. Maybe I shouldn't have?

• You must pay them unless your profit is going to be less than £5,075 for the year, and as they help your pension record it is probably best to pay them even then.

How do I get an idea of how much tax I will pay? What are Class 4 NICs? Is that when you paty more NICs because you have a profit?

• You will pay income tax at 20% on profit over £6,475 in 2010/11, plus Class 4 NI at 8% on profit over £5,715. This can usually be calculated quickly as 28% of your total profit, less £1,752. You will have to pay this by the end of January 2012, plus if the total is more than £1,000 you will have to pay an additional 50% of the total as a payment on account for 2011/12, and another 50% in July 2012.

I am thinking of other expenses I should be putting in my accounts. Don't do phone bills as seems to time consuming. Any tips?

• I'm going to leave this one for others to answer

I will be needing a double buggy from June (solely for minded children). Am looking at one that costs about £350 as I do alot of walking on school runs. Should this be under toys and equipment or Annual Investment Allowance? Does it make a difference anyway?

• Annual Investment Allowance: the effect on your tax bill will be the same as if you put it in expenses.

Should I be paying money into a personal pension plan. Would this be before tax? How does this work when self employed?

• Have a look at this information about pensions. You might find a Stakeholder Pension suitable. The way they work is that for every £100 you pay in to the pension scheme, the scheme reclaims £25 from HMRC so that £125 goes in in total (20% tax on £125 is £25). If you are not sure if you will end up paying tax, don't pay in more than £2,880 and this will still be topped up by 20%, even if you haven't paid the 20% in the first place!

Thanks for any answers!

[libellule]

Thank you for your help.
I will look into stakeholder pensions.