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The Book-keepers Forum (UK) -> VAT, Payroll & Tax -> Class 4 NIC Contributions
Post Info TOPIC: Class 4 NIC Contributions
class71


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Class 4 NIC Contributions
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Good Afternoon All,
After recently qualifying as a bookkeeper, I'm know delving into the realms of personal tax returns for some family members to practice on ! Please can someone advise if the Class 4 NIC's (8% of profits between £ 5715 & £ 43875) are based on profits before or after the personal allowance has been deducted ?

I would assume it's calculated after the personal allowance but I can't find anything which confirms this !

Many thanks

Lisa
Class BK
 

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BackOfficeGroup


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Lisa

Class 4 are calculated on the profits less the 5715 lower threshold x8%. The personal allowance is only for tax calculations and not NI.

Hope that helps.

P

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class71


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Hi P

So they are just confusing me when it says 'taxable profits' !! Why can't they speak simple like the rest of us (especially me) !

So a self employed person with net profits of £ 8, 785 (before personal allowance deducted) would have to pay the following Class 4 NI's :

8785 - 5715 = 3070 x 8% =     £ 245.60

Is this correct ?
Lisa


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BackOfficeGroup


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Lisa

Looks right to me.

P

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class71


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Thanks very much P, gratefully appreciated !

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BackOfficeGroup


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You're wlecome.

P

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adi2402


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class71 wrote:

Hi P

So they are just confusing me when it says 'taxable profits' !! Why can't they speak simple like the rest of us (especially me) !

So a self employed person with net profits of £ 8, 785 (before personal allowance deducted) would have to pay the following Class 4 NI's :

8785 - 5715 = 3070 x 8% =     £ 245.60

Is this correct ?
Lisa


but beware that taxable profits and net profits need not be the same figrue.

If someone is refering to net profits I would have said they are generally referring to the accounts or some other such statement.  If referring to taxable profits this will be after tax computation adjustments applied to the net profits such as capital allowances etc.


 



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Forgive the typo's I generally do not proof read. Just lazy I guess!
class71


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Hi,

Thanks for the info, in this instance there are no capital allowances or other taxes, but it's nice to get clarity !
Lisa


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