Surely this is wrong??

[buzzy bee]

I just did my tax self assessment and my net profit was £12,000 and they've said I have to pay £1,600 tax.

Surely that's wrong??

I thought we only paid tax on earnings above £10k??

I wanna cry

[JCrakers]

Does it mention paying on account?
I had to do this...its a bummer

Plus if you earn over a certain amount you have to pay more NI

[Gherkin]

Think the tax allowance for last year 2011/2012 is £7475

Income Tax allowances table Income Tax allowances
2010-11 £6475
2011-12 £7475
2012-13 £8105

[ajc]

Think it seems right, I paid £1500 on just a bit less, horrid isnt it

[mum2two]

Sounds about right.

You get 7475 tax free, so you're paying 20% tax on £4525, which is £905

You then have to pay 9% class 4 NI on over about £5500 (around that figure), so 12000 - 5500 = £6500. 9% of this = £585.

£905 + £585 = £1490

As it's over £1000, you have to pay half on account for next year, by Jan 31st, and then other half in July, so another £750 odd

Totalling over £2000 from my calcualtions (but NI profit allowance might be wrong...)

xx

[buzzy bee]

Thanks for the replies... I am so gutted. That means that for the last year year I have worked my butt off 5 days a week 10 hours a day for the grand sum of £10,000.

Was it really worth it?!

And to make it worse I just listened to that bloomin radio 4 programme going on about how overpriced childcare is!!

[JCrakers]

Ive been minding for nearly 5yrs and this is the first year I've started to put money away each month.
I save £90 a month so when the bill comes its not so harsh

[JCrakers]

Thanks for the replies... I am so gutted. That means that for the last year year I have worked my butt off 5 days a week 10 hours a day for the grand sum of £10,000.

Was it really worth it?!

And to make it worse I just listened to that bloomin radio 4 programme going on about how overpriced childcare is!!

Yep...the joys of childminding eh

[The Juggler]

Thanks for the replies... I am so gutted. That means that for the last year year I have worked my butt off 5 days a week 10 hours a day for the grand sum of £10,000.

Was it really worth it?!

And to make it worse I just listened to that bloomin radio 4 programme going on about how overpriced childcare is!!

yes it's worth it. you are home with your kids. for that 10K you were better off as you didn't have to pay childcare - if you worked and earned 18K you'd lose 8k on childcare.

don't you find over the year you have as much disposable income as you would if you were in a job where you were earning much more per year?

I used to earn nearly £30k but with childcare, tax etc, I ended up with about £1,500 per month. Now I earn about £1,800 put £150 away for tax and NI each month and my expenses obviously come out of that but I try to keep them down. With all the tax breaks we get for minding on heating/wear and tear etc, means my declared income after expenses is about £12,000 I'm not much worse off than I was when I was working 5 days per week

[zippy]

good news is, it doesnt have to be paid till jan, I agree though does seem such a lot, dreading doing mine now.

[JCrakers]

yes it's worth it. you are home with your kids. for that 10K you were better off as you didn't have to pay childcare - if you worked and earned 18K you'd lose 8k on childcare.

don't you find over the year you have as much disposable income as you would if you were in a job where you were earning much more per year?

I used to earn nearly £30k but with childcare, tax etc, I ended up with about £1,500 per month. Now I earn about £1,800 put £150 away for tax and NI each month and my expenses obviously come out of that but I try to keep them down. With all the tax breaks we get for minding on heating/wear and tear etc, means my declared income after expenses is about £12,000 I'm not much worse off than I was when I was working 5 days per week

Very true