[trippyboy]

What figure is the higher level tax based on ?
And is that figure based onturnover or after outgoings?

[sunshine windows]

You'd pay the tax on profit, not total turnover. Not sure what the figure is though

[CleanClear]

Higher rate 40%    £31,866 to £150,000
Most people start paying higher rate tax on income over £41,865

https://www.gov.uk/income-tax-rates/current-rates-and-allowances

[SeanK]

You pay 20% on anything earned up to £31865.
You pay 40% on anything earned after £31866.
On the first £10000 you pay nothing.
This is all based on profit after expenses.

[trippyboy]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

[Martin Lane]

There is also a 60% tax bracket for earnings between £100k and 121k  then it's 45% after that

[KS Cleaning]

There is also a 60% tax bracket for earnings between £100k and 121k  then it's 45% after that

You would hit the VAT threshold before this

[ChumBucket]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

Are you kidding?

[PoleKing]

There is also a 60% tax bracket for earnings between £100k and 121k  then it's 45% after that

Never heard of this 
UK doesn't have a 60% tax...
Any links please?

Or are you pulling his plonker?

[PoleKing]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

Yeah, but don't forget your National Insurance.
That's another 9%

I found that not much after £50k was better to be limited rather than sole trader.

[ChumBucket]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

Yeah, but don't forget your National Insurance.
That's another 9%

I found that not much after £50k was better to be limited rather than sole trader.

I strongly suggest you both get an accountant!!

[PoleKing]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

Yeah, but don't forget your National Insurance.
That's another 9%

I found that not much after £50k was better to be limited rather than sole trader.

I strongly suggest you both get an accountant!!

Me?

I have got an accountant.
I've mentioned them in this thread.

What do you mean?

[Jonny 87]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

Yeah, but don't forget your National Insurance.
That's another 9%

I found that not much after £50k was better to be limited rather than sole trader.

Is that how national insurance works? I'm not clued up to be honest. I just give all my books to the accountant.

So it's 20% off profit plus a further 9% of total profit? I'm still in the 20% bracket of income.

So making it actually 29% of your total profit you get taxed on?

I pay a small national insurance rate very month but it's less than £15. I'm guessing this isn't part of the 9%.

[PoleKing]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

Yeah, but don't forget your National Insurance.
That's another 9%

I found that not much after £50k was better to be limited rather than sole trader.

Is that how national insurance works? I'm not clued up to be honest. I just give all my books to the accountant.

So it's 20% off profit plus a further 9% of total profit? I'm still in the 20% bracket of income.

So making it actually 29% of your total profit you get taxed on?

I pay a small national insurance rate very month but it's less than £15. I'm guessing this isn't part of the 9%.

You'll probably pay class 2 and 4.
Yeah, the couple of quid a week ain't the 9%.

I think this is where WinPro is getting his bloomers tangled

[trippyboy]

Think I will give my accountant a bell in the morning, if shes open that is

[Jonny 87]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

Yeah, but don't forget your National Insurance.
That's another 9%

I found that not much after £50k was better to be limited rather than sole trader.

Is that how national insurance works? I'm not clued up to be honest. I just give all my books to the accountant.

So it's 20% off profit plus a further 9% of total profit? I'm still in the 20% bracket of income.

So making it actually 29% of your total profit you get taxed on?

I pay a small national insurance rate very month but it's less than £15. I'm guessing this isn't part of the 9%.

You'll probably pay class 2 and 4.
Yeah, the couple of quid a week ain't the 9%.

I think this is where WinPro is getting his bloomers tangled

Thanks mate. Didn't actually know that technically it's a rate of 29% we all pay. Makes sense though.

[ChumBucket]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

Yeah, but don't forget your National Insurance.
That's another 9%

I found that not much after £50k was better to be limited rather than sole trader.

I strongly suggest you both get an accountant!!

Me?

I have got an accountant.
I've mentioned them in this thread.

What do you mean?

It seems you are agreeing (as you reply "yeah" to the question) that trippy can knock 10k (tax relief) off his overall profit to bring his taxable profits value below the 40% threshold?

[KS Cleaning]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

first 10K tax free
                  10K- 31 865@20%
                  31 866-39K@40%

[ChumBucket]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

first 10K tax free
                  10K- 31 865@20%
                  31 866-39K@40%

That is correct but it's not what Trippy is proposing!! 

[KS Cleaning]

So if my turnover for the year is 47 k, minus my expenses, lets say 8k which leaves a profit of 39 k, minus 10k allowence equals a total of 29k taxable figure at the lower rate of 20 % ??

first 10K tax free
                  10K- 31 865@20%
                  31 866-39K@40%

That is correct but it's not what Trippy is proposing!! 

I actually got caught out with this as I used to employ my wife as secretary to keep my profits down, only she got promotion at her main job meaning her combined wages went into the 40% tax bracket, only realised when she got her P60....needless to say she no longer works for me.