Tax - what would I pay?

[annaross]

I am just about to put together a contract to take on my first Mindee at the beginning of March.

I have tried several times to get through the HMRC Tax Helpline over the past few days but get fed up of being on hold for 45 mins+ so am hoping somebody might have the answer to some of my questions.

1. Which tax year are we currently in? (sorry if that is a silly question) and what is the tax allowance for this year?

2. If say for example the personal tax allowance for the year was £1,000 and I earnt £1,200 in that year would I only have to pay 20% tax on the £200 over the personal allowance?

3. As I am hoping to start minding at the beginning of March, would I have to pay tax on what I earnt before the new tax year starts in April?

Any help would be greatly appreciated.

Thanks,
Anna

[tulip0803]

I am just about to put together a contract to take on my first Mindee at the beginning of March.

I have tried several times to get through the HMRC Tax Helpline over the past few days but get fed up of being on hold for 45 mins+ so am hoping somebody might have the answer to some of my questions.

1. Which tax year are we currently in? (sorry if that is a silly question) and what is the tax allowance for this year? We are in tax year 2011/12. Your personal tax free allowance is £7475.

2. If say for example the personal tax allowance for the year was £1,000 and I earnt £1,200 in that year would I only have to pay 20% tax on the £200 over the personal allowance? Yes. You only pay tax on your total annual income on the amount over the tax free allowance of £7475

3. As I am hoping to start minding at the beginning of March, would I have to pay tax on what I earnt before the new tax year starts in April? If you have already used your tax free allowance up in another job then you will be taxed on your income AFTER expences and wear and tear have been deducted. You will receive notification to submit your tax return for 2011/2012 in April 2012.

Any help would be greatly appreciated.

Thanks,
Anna

It is very confusing to start with. If you have not had another job or another income then you will be under the personal allowance threshold and you will not have to pay tax on your childminding income for March. Even if not you will still need to fill in a tax return between April 2012 & Jan 2013.
You will need to register as self-employed with the tax office as soon as possible after you actually start working.
Your tax return for 2011/12 will need to be completed by end Jan 2013 if you do it online (earlier if you do it on paper).
Don't forget to record all your setting up expences - if you make a loss you can carry it over to next year to reduce your tax liability for 2012/13 tax year.

Hope that helps a bit and I have not confused you more.

Good luck

[LeeMarie]

Hi,

1. We're currently in the tax year 2011-2012 and the personal allowance is £7475.

2. You pay 10% tax on the first £2560 after deducting your personal allowance and 20% on everything else up to £35000.

3. Yes, you would have to pay tax if your net income (after deducting expenses) was more than £7475 which unless you have another income is unlikely after one month.

HTH x.

[tulip0803]

Hi,

1. We're currently in the tax year 2011-2012 and the personal allowance is £7475.

2. You pay 10% tax on the first £2560 after deducting your personal allowance and 20% on everything else up to £35000.

3. Yes, you would have to pay tax if your net income (after deducting expenses) was more than £7475 which unless you have another income is unlikely after one month.

HTH x.

Didn't they do away with the 10% tax bracket a few years ago which was why labour increased the tax allowance in the middle of a financial year (after there was a mass protest about it hitting low paid workers hardest!) -before the new govt started raising it?