Simplified returns - is it really that simple?

[worldgonecrazy]

I am trying to keep an eye on what tax bill I am likely to receive for some SE work that I do at weekends. I am working it out thus:

Income - expenditure = profit.
Example
Income £3000 - Expenditure £1000 = profit £2000

Mileage at HMRC rate of 45p per mile
Example
Total mileage = 1000 miles = £450

Total to pay tax on = profit less mileage allowance
Example
£2000 - £450 = £1550

So I will be paying 20% tax on £1550 = £310

So my tax bill for the above simplified accounts would be £310?

Is that correct?

If that's all you're earning then it's no tax because you have a personal allowance to take into account.

If it's not then yes that's the tax plus national insurance.

Yes, keep an eye on the NI issue.

If you earn over a certain threshold, you pay NI on the whole lot rather than just the excess over the threshold.

Anyway, bung it in the online tax return and get it to calculate what you owe!

Thank you - I don't have to complete a return yet, this is for tax year 2013-2014 as I only recently started doing SE work at weekends. I just wanted to be sure I was doing it correctly so I can ensure that I have the available funds to pay the tax.

I earn rather more than that in my day job and tax and NI are taken care of PAYE. My self employed income will be less than £5,750 so I have opted out of NI class 2 contributions on my SE income.

NI on your job is for the job
if your SE earnings go over the NI limits you'll owe NI on them
unless your job pays max NI - in which case you'd be well into the 40% tax band on your SE earnings as well