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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15660
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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# I am a self employed bricklayer and I am taxed at source

### Resolved Question:

Hi,
I am a self employed bricklayer and I am taxed at source by a payment agency called 'The Guild'. I have earnt £32,500 in the 2015/16 tax year and have been taxed £6,500 on this sum. My understanding is that everyone is entitled to earn £10k per annum before paying tax and therefore I assumed that my rebate would be a minimum of 2k to account for this. However initial self assessment calculations (including additional expenses totalling roughly 5k) online are coming in at only £1,300. Can you shed any light?
Submitted: 6 months ago.
Category: Tax
Expert:  TonyTax replied 6 months ago.
Hi. If you earned &pound;32,500 and incurred expenses of &pound;5,000, you made a profit of &pound;27,500. The personal allowance for 2015/16 is &pound;10,600 so you have net taxable income of &pound;16,900. Income Tax at 20% is &pound;3,380. Class 4 NIC is &pound;1,749.60 (&pound;32,500 - &pound;5,000 = &pound;27,500 - &pound;8,060 x 9%). Class 2 NIC is &pound;145.60 (&pound;2.80 x 52). That's a total tax and NIC liability of &pound;5,275.20. Deduct the &pound;6,500.00 tax deducted at source and you are left with a repayment of &pound;1,224.80. I hope this helps but let me know if you have any further questions.
Customer: replied 6 months ago.
Thanks, ***** ***** can kind of get my head around that. Can I get you to explain the £8,060 x 9% calculation for me though as that's where you loose me.Thanks
Expert:  TonyTax replied 6 months ago.
You don't pay Class 4 NIC on the first &pound;8,060 of your profit. Take a look here (3.2).
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15660
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
Customer: replied 6 months ago.
Ah that makes sense! Thanks very much. Youve been most helpful.
Expert:  TonyTax replied 6 months ago.
Thanks.

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