CM CLUB - urgent advice re tax please?????

[star1976]

Just done my online assessment and got confused with it asking if we are excluded from paying Class 4 NI contributions??? We pay Class 2 don't we????

Also it is saying that I need to pay £256 towards next years tax, that can't be right can it?????????

And saying tax for this year is over £700 and earnings after expenses were only £8,700. Does that sound right to anyone. HELP!!!!!

Are you doing 07-08 tax?

Yes 07-08

My earnings were just over £9000 and I have to pay over £800 so I'm afraid to say your tax sounds correct
It sounds a lot but most employed people I know pay a lot more tax over the year. It's a lot in one go though isn't it.
I've also been asked to pay towards next year's tax but I'm going to tell them to stuff it because I have no idea what I'll earn next year. I can only barely scrape up enough for this year as it is! Greedy bastards

You get 5225 tax free
Then pay 10% tax on 2230 (so £223)
8700-5225=3475
3475-2230=1245

1245*22%=£273.90

So total Tax = 223+273.90 = 496.90

NI is 8% above 5225
so that is 8% of 3475= £278

So total due is £765

Please check my sums I often get them wrong - but I think it's about right

I don't think you can chose to not pay them anticipated tax

Oh my god no idea how I will find the money!!!! Wedding fund seems to be going to lose quite a lot of money!!!!!!

Have you submitted your tax return?

If not have you included all your expenses?

Have I done the right thing by saying that I am exempt from Class 4 National Insurance contributions?????

look here

You pay NI at 8% on profits over 5225

Once they have assessed that you are due to pay some tax for last year they assume you are going to earn at the same rate this year and will ask for half the expected tax on account.

It's a bit late now, but if you don't have any savings you really need to be putting something from each week's earnings into a bank account so that you can pay your tax bill when you need to. You will have until the 31st January 2009 to pay your bill (I think), but that isn't really much help when Christmas is getting closer by the day.

KatyMac - So I need to say that I am not exempt from Class 4 then????? Because my earning are in that area. Even though the NI we pay is the Class 2?

I'm confused (not that it takes much).

Arfa - luckily have already bought all my presents with any extra ad hoc work I got over the past few months

Star1976, i had the same problem and called the helpline. We have to pay 8% NI on profits over 5225 as KatyMac says above. This is on top of the NI we pay by direct debit each month.

Are you sure that you have included all your expenses? Double check that. You can amend it online, too. I had a shock when my tax was also about £800 but then remembered I had missed out on some arts and craft expenses, my cleaner, mobile and land line phone and a couple of other things..... my tax came right down to £200ish.

Have another look to make sure you have included everything.

Am pretty sure I have put all expenses that I can, income before expenses was just over £16000, now £8,790. Surely can't be any more expenses allowed than that?

The expenses allowed are the expenses that there are

Food, elec, stationery, craft, council tax, water rates, mileage allowances, lightbulbs, toilet roll

I can't think what else?

percentage rent / mortgage interest, outings, wipes, cleaning materials, wear and tear (you have probably done that already), OFSTED reg fees, insurance, NMCA membership if applicable plus cost of contracts, paperwork etc, printing ink, cleaning costs (dry cleaning, carpets, cleaner) . Will check for more....

Wish they had warned us about the 8% NI as well as the Income Tax.

Think I have covered everything expenses wise!

Thanks for everyone's help, think I was just shocked and panicked when I saw the figure in front of me. Will be much more organised for next years tax bill. In the meantime DP is going to lend me the money and can pay him back over next few months.

As I said have luckily already bought all xmas presents (thank god not in same position as last year where had to take a payment break on mortgage to afford them).

Hopefully will get a new full timer soon (???????) and with extra work over xmas holidays will be able to pay at least half of tax bill back to DP sooner rather than later.

Sundry items & toys
Food & drink
Stationary
Telephone (10%)
Wear & Tear (10%)
Toiletries & Cleaning
Outings
Group Meetings
NCMA membership, insurance
Council Tax (10%)
Mortgage Interest/Rent
Home insurance (a proportion of)
Heat & Light (1/3)
Petrol/Vehicle Expenses
Advertising
Training
Bank Charges & Interest
Wages
Accountancy Fee

From the above list - some may or may not be applicable to you.
I also added magazines like ChildCare and Creative Steps etc.

Birthday presents and cards, Christmas presents etc for mindees.

You cannot put through your mortgage interest.

Shame about the mortgage interest as had put through everything except that I think!

Actually didn't know about 10% telephone, will add that one. Is that 10% of mobile and land line????

Bank charges and interest? Didn't know we could do that either??? Surely any charges are my fault? Or only certain charges?

Basically, you can claim for anything that came about because of childminding. So, if you went overdrawn because of a late payment from a parent then you can claim those bank charges, but if you went overdrawn because you spent a lot of money one weekend then you can't.

That's good to know, thanks, have one consistently bad payer who has cause me charges in the past!

So for the phone bill is it 10% of mobile and home phone???