This post is for the self-employed – not Limited companies (which operate under Corporation Tax rather than Personal Income Tax)

A recurring issue for the self-employed is the question of how much tax to put aside for their ‘tax pot’. What you do not want to happen is to get hit with an unexpected tax bill  – our approach at JF Financial Management is very much one of planning ahead and organisation – we genuinely care about our clients and we want them to be fully aware of their tax position.

UPDATE – you might want to check out our tax calculator for the self employed.

For the year 2013-14 (6th April 2013 to 5th April 2014) I have attached below a link to a document which tells you what percentage of your taxable income you should be putting aside. There are two different tables – one if you are still paying off a student loan and another one if you aren’t.

Personal Tax 13-14 Percentage Tables

Remember if you are a sole trader or partnership you will have to take your estimate of your sales/income less any tax allowable expenses to arrive at your estimated taxable profit. And don’t forget to include other taxable income you might have such as employment income, dividends, property rentals, the new child benefit clawback etc.(there are many more).

Remember there is also the issue of ‘Payments on Account’ which you need to consider, see below:

http://www.hmrc.gov.uk/sa/understand-statement.htm#5

This table also does not take into account your Class 2 NIC payments which are paid directly to HMRC outside of your tax return which for 2013-14 are fixed at £2.70 per week.

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