Class 4 Seems Excessive

by **awfy** on Thu Jan 26, 2012 2:01 pm

Hello,

I'm in the process of filling out my tax return for 2010-2011 as self-employed. Now it asks whether or not I'm Class 4 exempt which I've gathered from their guide that I'm not from my age (21). However it seems to be excessively high for the amount I earned in the period between April 2010 and April 2011. After putting in all my information and my total income of £22,918 GBP I get the following page;

http://f.cl.ly/items/3p2W2F0N312F1K10450v/Screen%20Shot%202012-01-26%20at%204.53.36%20AM.png

It doesn't seem right that the number is so high unless I'm missing something. It means by the end of October I will have paid £9,329.68 GBP in taxes and national insurance if I'm understanding it correctly. Which means nearly half of my income will be gone. I did notice it kept using the term "profit", do I have to narrow my income down to a certain profit margin or does my entire income count as profit? As much as I understand that you should expect to lose a few thousand it just seems crazy that nearly 41% of my income would vanish.

Huge thanks in advance for any help and advice!

by **section 44** on Thu Jan 26, 2012 2:22 pm

profit not income

by **awfy** on Thu Jan 26, 2012 2:25 pm

I set my Wage in Disallowable expenses as my total income, is that correct?

by **section 44** on Thu Jan 26, 2012 2:29 pm

wage? are you employed?

by **awfy** on Thu Jan 26, 2012 2:30 pm

I'm self-employed.

by **awfy** on Thu Jan 26, 2012 2:46 pm

Do I require to put in all of my personal expenses as I ignored the expenses section entirely. I haven't filled in a tax return before which is explaining my lack of knowledge about them. I'm guessing it's calculating my current Class 4 payment based on my entire income for 2010-2011 being profit due to no expenses, would I be guessing correctly?