Hi, thanks for your reply. 36k is the overall profits generated by 2 people so if splitting it 50/50 per partner it would be 18k each.
Right; you have a self employment income for 13/14 tax year of GBP 19282.
Deduct your personal allowance of GBP 9440 gives 9842 quid taxable at 20% = 1968 tax due.
Thus the estimated figures given in your example appear very wrong and should be challenged. How can tax be computed be so high and why should such a large proportion be demanded as an interim payment?
You should go back to your accountant to justify his figures or, if you normally deal with HMRC direct, then make an appeal over their computations. I do hope I have pointed you in the right direction.
Thanks, ***** ***** let me know how I should move forward ?, appoint a new accountant or what questions I should ask ?. Please give me a steer on the email exchange below and if you could give me a basic idea if my question is justified ? -
Im shocked that we are facing a tax bill of £10,248 in January (it is almost all of our working capital). Forgive me but im going to have to take this quite high level to aid my understanding which is as follows . (I have stripped out payments on account in the first part of this).
Logo Co 2013 profits = £35,933 (profit generated by 2 people)
Personal allowances for both myself and Kim = (9.4k each) = £18,800
Profits £35,933 minus personal allowances of £18,800 = 17.13k for tax to be paid on at 20% = £3,426
In your email below the tax due is –
Darren - £2752.82
Kim - £6308.51
Total tax due (without payments on account) = £9061.33
So in summary I cant get my head around the differences here – according to my basic calculations the total tax bill based on profits minus personal allowances should be £3,426 . The actual amount we are saying to be paid is £9061.33 (more than double the basic calculation).
Could you please help me understand the above in the simplest possible terms.
Payment on account.
our company has seen a small growth in profits so lets assume the 2015 earnings will be in the region of 40k profits.
40k total minus tax allowances of 20k = 20k taxable at 20% - The tax bill for Both me and Kim should be in the region of 4K . Why are we looking at paying £4530 on account ?, this is higher than the expected total tax due.
I appreciate that you are going away on holiday but I do need to get an understanding of the above ASAP for my own peace of mind and sanity !
I look forward to your reply.
Kim has always paid tax on time and to our knowledge there are no back payment due at all, the amounts he is quoting are for the current position. So in summary, based on the information that I have provided, do you think that the figures my accountant has supplied may be wrong ? . We have no direct dealings with the HMRC and this is all done by our accountant. So on the face of the information that I have provided would you suggest the figures quoted by our accountant are too high ? .
Thanks and i'll rate and pay you upon your reply.
Have i paid you now ?, sorry its the first time using this so not sure if i need to take any further steps to ensure you are paid.
I was very happy with your service and answers