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self employed
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im thinking about going self employed iv been wriring all my figures down iv made 1800 pounds over 4 weeks hows much tax and ni would i have to pay out of that thanks
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Tax is calculated on your total earnings during the tax year. While you're employed, the PAYE system divides everything up into weekly (or monthly) chunks. Since you still get paid during your holidays, it's easy to calculate how much tax you pay each week (or month).
The amount of tax you'd pay if you were self-employed depends upon how many weeks of the year you'll actually work. (You obviously don't get paid when you take a holiday). The following assumes that your current tax code is 603L, but is based upon your code for the new tax year (from April) which should be 647L:
Your figures suggest that you average �450 per week. If you never took a holiday (and you were able to keep that amount coming in over the Christmas and New Year period), you'd lose an average of �65.10 per week in income tax.
If you took 4 (unpaid) weeks off, you'd average �63.02 tax per week, for each week that you were working
If you took 6 weeks unpaid holiday, you'd average �61.85 tax for each working week.
Your Class 2 National Insurance contributions would be �2.40 per week (for all 52 weeks, irrespective of whether you'd taken a holiday or not).
Your Class 4 National Insurance contributions are profit related. Based on the above figures, if you worked 52 weeks of the year, they'd average �27.21 per week. If you worked for 48 weeks of the year, they'd average �26.48 for each of those weeks. If you worked for 46 weeks, they'd average �26.06 for each of those weeks.
Chris
The amount of tax you'd pay if you were self-employed depends upon how many weeks of the year you'll actually work. (You obviously don't get paid when you take a holiday). The following assumes that your current tax code is 603L, but is based upon your code for the new tax year (from April) which should be 647L:
Your figures suggest that you average �450 per week. If you never took a holiday (and you were able to keep that amount coming in over the Christmas and New Year period), you'd lose an average of �65.10 per week in income tax.
If you took 4 (unpaid) weeks off, you'd average �63.02 tax per week, for each week that you were working
If you took 6 weeks unpaid holiday, you'd average �61.85 tax for each working week.
Your Class 2 National Insurance contributions would be �2.40 per week (for all 52 weeks, irrespective of whether you'd taken a holiday or not).
Your Class 4 National Insurance contributions are profit related. Based on the above figures, if you worked 52 weeks of the year, they'd average �27.21 per week. If you worked for 48 weeks of the year, they'd average �26.48 for each of those weeks. If you worked for 46 weeks, they'd average �26.06 for each of those weeks.
Chris
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