Tax Related Topics

[curlytots]

Hello,

A wee question, when it comes to NI contributions, I was looking on the HMRC website, and it breaks it down into a weekly basis.

if you earn between £107 and £146 you’re automatically covered for State Pension and benefits
12% on your weekly earnings between £146 and £817
2% on any weekly earnings over £817

What I want to ask is - do you break these earnings down as an average over the whole yearly weeks? i.e. Say you earned £45k, but some weeks you earned £1200, others maybe 650 etc. (So this would affect the percentages). Or do you say, well, 45k is divided by 52 (weeks in the year), so then your profits would be £865.38 on average?

Otherwise, it could end up being a totally different figure?

Sorry in advance if I'm not being clear!

EDIT: Or would it be a different figure?! Maths have never been my strong point, I'm a humanities girl... *shakes head*

xx

You need to look at Class 2 and Class 4 rates - the above numbers you quote are for employee/employer which are not applicable to self employed.

Class 2 is paid weekly, irrespective of profits.. class 4 is annual profits based.

Ohhhhhh ok! What a numpty I am, lol.

So, with regards being self employed, you take the annual figure as opposed to weekly profits?

[friendly accountant]

Hello,

A wee question, when it comes to NI contributions, I was looking on the HMRC website, and it breaks it down into a weekly basis.

if you earn between £107 and £146 you’re automatically covered for State Pension and benefits
12% on your weekly earnings between £146 and £817
2% on any weekly earnings over £817

What I want to ask is - do you break these earnings down as an average over the whole yearly weeks? i.e. Say you earned £45k, but some weeks you earned £1200, others maybe 650 etc. (So this would affect the percentages). Or do you say, well, 45k is divided by 52 (weeks in the year), so then your profits would be £865.38 on average?

Otherwise, it could end up being a totally different figure?

Sorry in advance if I'm not being clear!

EDIT: Or would it be a different figure?! Maths have never been my strong point, I'm a humanities girl... *shakes head*

xx

You need to look at Class 2 and Class 4 rates - the above numbers you quote are for employee/employer which are not applicable to self employed.

Class 2 is paid weekly, irrespective of profits.. class 4 is annual profits based.

Ohhhhhh ok! What a numpty I am, lol.

So, with regards being self employed, you take the annual figure as opposed to weekly profits?

Yep, the tax system looks at the annual profits.

[curlytots]

Thanks, my own fault for not reading properly... lol

[sexy_smurfet]

Really confused on this one, when i declare my income with adultwork, do i say what the total i earned before the 41 percent stoppages or just say what the total i got in my bank after the 41 percent. hope that made sence thanks

[xKatieBabyx]

The total in your bank hun.

Your incomings = total you actually get in your bank
Outgoings = all tax deductables, including featuring & positioning costs

[Trinity-Belle]

The total in your bank hun.

Your incomings = total you actually get in your bank
Outgoings = all tax deductables, including featuring & positioning costs

Errrrr..... if you are only counting money in the bank as income, then you have already accounted for featuring and positioning because they were taken out before the money hit you account.... you can't then claim for them again! Not unless you are putting money into AW to pay for them... which would be a slightly bizarre thing to do....

(I'm sure that's not what you meant, but just wanted to clarify)

[sexy_smurfet]

hi trinity no thats not what i meant :-) thats confused me lol

And thankyou katie thats what i thought :-) thankyou

[Ana_X]

Really confused on this one, when i declare my income with adultwork, do i say what the total i earned before the 41 percent stoppages or just say what the total i got in my bank after the 41 percent. hope that made sence thanks

If you're taking everything which lands in your bank account as a wage then 30% of it should be put aside for income tax and NI contributions, the other 70% is yours to spend.

However, if say £500 lands in your account and you pay yourself a fixed weekly wage things work differently. Say you want £250 as a wage, after taking off 30% for tax and NI on that you would then have £175 cash in your purse, and £75 put away for your tax bill.

That leave you £250 still in the bank which hasn't yet been touched. It's up to you if you take it as a wage (not forgetting to take off that 30%) OR if you're going to use it for the business i.e, things you need to have in order to work. There is tax to pay on business profits at the end of the year too - and that's where I'll stop talking because this part confuses the f*ck out of me and that's why I pay an accountant :p

[courtesanannabel]

hi trinity no thats not what i meant :-) thats confused me lol

And thankyou katie thats what i thought :-) thankyou

Just had to say something after reading some of the first posts and especially the one on vat

Last year I was concerned about nearing the vat threshold and spoke with my long term accountant and the tax man, had a meeting with them to - found out useful info on vat and aw,

It's always worth shopping around ladies for advice and phoning the tax office direct to get the correct info - there is NO vat payable on earnings from aw - yes, you have to register as I have now done and are now exempt

Happy to give my accountants details to anyone who would like it

Anna

[xKatieBabyx]

I thought there was vat payable on earnings over 71k?

Am I wrong re deducting featuring and positioning then, cause that's what I have done for my tax returns