Folksy Ltd

Tax return

(Diane Mc Kechnie) #1

Could someone help me with my tax return, I have just tried to phone them and cant get by the security questions as automated service isnt understanding my accent!
I dont have a high income so believe I dont have to pay nic contributions . I have an exemption certificate for class 2 I think somewhere but is that not scrapped now? I have managed to fill in the section regarding class 2 but when I come to the class 4 part it doesnt mention in the help part that you are exempt if low profit, so do I need an exemption certificate for that ?

(Rhiannon Rose) #2

It depends what you mean by low! There are several websites which will help you calculate NI and tax: just google “PAYE calculator”. The website should have all the info that you need as well. Remember, NI is calculated weekly, not for the whole year.

(Sasha Garrett) #3

Class 2 and class 4 NI contributions are both still in existance (for now they seem to change it every year). If you earn below £5965 you don’t have to pay the class 2 but you can elect to do so if you wish to keep your state pension up to date. If you earn between £5965 and £8060 then you pay class 2 at the rate of £2.80 a week. If you earn over £8060 then you pay 9% on your profits over that (upto a ceiling and then it drops on profits over that) (that all came from HMRC’s website). When I filled out my online tax return earlier this year for the previous tax year it worked out if I owed class 2 or class 4 and there is a check box to tick if you want to elect to pay the class 2 even though you don’t earn enough.

(Diane Mc Kechnie) #4

my income is low (cardmaking) so I’ve elected not to pay class 2 .
Its the different part where It asks me if I am exempt from paying class 4 and was going to mark it yes cos dont earn enough for class 4 but do I need an exemption certificate like I had for the class 2?

(Sasha Garrett) #5

I don’t recall being asked about class 4 on the online form - it had probably already done the math and realised that I didn’t reach the threshold so skipped that bit. I can’t find any reference to a class 4 NI exemption certificate online so I’m not sure it exists. If you have a small earnings exemption certificate that should (but I am not an expert on this and would advise double checking with the tax office) be sufficient as if you are exempt from class 2 (which is the lower band) then you would be exempt from class 4 (the upper band).

(Grimm Exhibition) #6

Im no expert either but that’s the way I see it too(re Sashas comment). Im trying to sort out class 2 payment as I pay it voluntarily but Im sure now(on my current form and future forms) the form itself will work out what class 2 needs to be paid if not exempt. Class 4 only needs to be paid if you have high earnings. If you don’t earn enough to pay class 2 it makes sense that you won’t have to pay class 4, Im not sure if any exemption form for it though so maybe its not needed.

… I just found this link in my favourites, it may help.

(Sasha Garrett) #7

@GrimmExhibition The online tax return does all the maths for you. I checked the box to voluntarily pay my class 2 and it automatically deducted the amount of tax I’d over paid to give me a revised amount which I then paid online using my unique tax reference number (a 10 digit number that they quote on any correspondence or I think it tells you when you log in to the self assessment thing). All the different ways of paying can be found here but you can’t directly pay it from the tax return so need to write down the amount that you need to pay.

(Diane Mc Kechnie) #8

Thank you for your help i think maybe the question was for people that earn more than a certain amount and maybe for some reason they are exempt but I will add a note on form to explain my confusion