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Effective Working Relationships

Exam revision materials for Plumbing Level 2&3 and ACS Gas Safety test

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UK Taxation Systems

Sole-trader

Introduction

  • As a sole-trader you can use all of the money your business brings to you
  • Accounting period you need to submit data on is from 6th of April to 5th of April
    • Include all of the invoices within this period even once that haven't been payed
  • You need to complete a self-assessment tax return every year 
    • paper return before 31st of October
    • on-line return before 31st of January
    • late tax return penalty £100
    • daily penalty £10 (maximum £900)
< Go Back2014-10-05

Income tax

  • The amount of tax you pay depends on the taxable income above Personal allowance you received for the last year
    • a gross income is is your gross profit
    • a profit is  your turnover minus all of the expenses
    • in your profit you must include all of the money you invoiced in the past year even you haven't been paid yet
  • You don't have to pay any tax if your income is below National Personal Allowance which is different from year to year and currently is £10,000 for 2014-2015
  • Income tax rates:
    • Basic rate 20% on income from £0 to £31,866 above Personal Allowance (£10,000). If you earned £41,866 you will only pay 20% tax on £31,866
    • Higher rate 40% on income from £31,866 to 150,000 
    • Additional rate 45% on income over £150,000
  • National Insurance Contributions:
    • ​NINO Class 2 - £2.75 per/week
    • NINO Class 4 - 9% on taxable income
< Go Back2014-10-05