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Self employed Tax Accounting Software NI & Income Tax Calculator Self employed business profits are not taxed under the PAYE system for employees and are separately assessed for income tax and national insurance based upon the net taxable profit.
Net taxable profit is the total sales income less business expenses and capital tax allowances. To calculate the income tax liability deduct from the net taxable profit the personal tax allowance and calculate income tax at 20 per cent up to the upper tax band and 40 per cent over the upper tax band. Class 4 national insurance contributions are 8 per cent of net taxable profit between the lower NI threshold and upper NI threshold. Above the upper national insurance threshold the NI payable is 1 per cent
The DIY Tax Accounting Software for Sole Trader accounts and Self employed accounting contain the tax calculator shown below to automatically calculate the income tax liability. The tax accounting software also uses the accounting transactions entered during the financial year to estimate the year end net taxable profit and calculate the year end national insurance and income tax liability.
"DIY Tax accounting software for the self employed accounts uses an automated NI and income tax calculator to produce the income tax liability" | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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