Taxes - Gains and Losses

[lorettacritchet]

Hi, for my first year i was at a loss of -£284. this was for tax year 2010/2011, things are currently being estimated that I might make £11k after expenses for the 2011/2012 year....what rate does this get taxed at? Is it 20%? Will they expect this payment by April 2013? What happens to the losses made in the first year?

thanks

[Chatterbox Childcare]

I wasn't sure if you took off wear and tear but this is what I think will be:

£11000 less £1100 wear and tear = £9900 less personal allowance of £7435 = £2425

As a rough calculation to allow for tax and ni you will have 606.00 due in January 2013 plus £300 towards 12/13 accounts and £300 in July towards12/13 accounts

If you have already taken wear and tear off then you are looking at a taxable figure of £880 due and £400 in Jan 2013 and July 2013

[MrAnchovy]

Not sure where you are getting those numbers from Debbie, for tax and Class 4 NI in 2011/12 you need to take off £7,397 and multiply by 29%.

So if profits are £9,900 that's £725. Below £1,000 there is no payment on account so that's all there is to pay by 31 January 2013.

If profits are £11,000 it would be £1,045 which would attract a payment on account.

BUT both of these ignore the loss brought forward.

Loretta I strongly recommend you talk to an accountant because it is likely that by extending your accounting period and resubmitting 2010/11 you can substantially reduce or even eliminate your bill for 2011/12.

[lorettacritchet]

Hi,

My accounts was already submitted for 2010/2011, I obviously still don't know my profits for 2011/2012, £11k is an assumption, I just wanted to know roughly at what rate tax is charged.
Definetely don't understand your last sentence though re: resubmitting 2010/2011 to eliminate the tax for the following year???/ don't get maths at all !!!

Not sure whe
re you are getting those numbers from Debbie, for tax and Class 4 NI in 2011/12 you need to take off £7,397 and multiply by 29%.

So if profits are £9,900 that's £725. Below £1,000 there is no payment on account so that's all there is to pay by 31 January 2013.

If profits are £11,000 it would be £1,045 which would attract a payment on account.

BUT both of these ignore the loss brought forward.

Loretta I strongly recommend you talk to an accountant because it is likely that by extending your accounting period and resubmitting 2010/11 you can substantially reduce or even eliminate your bill for 2011/12.

[MrAnchovy]

I just wanted to know roughly at what rate tax is charged.

For 2011/12 and including Class 4 NI, 29% on profits over £7,400

Definetely don't understand your last sentence though re: resubmitting 2010/2011 to eliminate the tax for the following year???

I know, it's really complicated and I am trying to work out a way of explaining it. Stick around for a couple of months (you have almost a year left to do this) and I'll see if I can make it clearer! When did you start childminding?

[Tam's Tribe]

I wasn't sure if you took off wear and tear but this is what I think will be:

£11000 less £1100 wear and tear = £9900 less personal allowance of £7435 = £2425

As a rough calculation to allow for tax and ni you will have 606.00 due in January 2013 plus £300 towards 12/13 accounts and £300 in July towards12/13 accounts

If you have already taken wear and tear off then you are looking at a taxable figure of £880 due and £400 in Jan 2013 and July 2013

Debbie, is the 10% Wear & Tear deducted off your year end profit or your monthly/yearly Turnover?

[MrAnchovy]

Debbie, is the 10% Wear & Tear deducted off your year end profit or your monthly/yearly Turnover?

Neither. You ADD 10% of your TURNOVER to your EXPENSES.

[Chatterbox Childcare]

Not sure where you are getting those numbers from Debbie, for tax and Class 4 NI in 2011/12 you need to take off £7,397 and multiply by 29%.

So if profits are £9,900 that's £725. Below £1,000 there is no payment on account so that's all there is to pay by 31 January 2013.

If profits are £11,000 it would be £1,045 which would attract a payment on account.

BUT both of these ignore the loss brought forward.

Loretta I strongly recommend you talk to an accountant because it is likely that by extending your accounting period and resubmitting 2010/11 you can substantially reduce or even eliminate your bill for 2011/12.

I took a rough estimate of 25% based on the profit to allow for the differences on tax and NI

Have I got this right them - you only pay payment on account once you pay tax of £1000 or more in a year?

[rickysmiths]

Thats right Debbie. It used to be £500 but the limit has been increased.