Why my income Tax is 0?

[ARWMB40]

Hi, 

I am both employed and self-employed. I filled in the Tax profile page with my estimated employed income and I have a positive self-employed income since June last year. The estimated Income Tax has always been 0GBP including Class 4 & Class 2 National Insurance Contribution - this can't be right. Can anyone help, please?

[JamesC]

Hey ARWMB40,

could you please send a screenshot of your tax profile page? Alternatively, you can Direct Message us your Email Address through our social media outlets, @QuickBooksUK on Facebook + Twitter, I'd like to look at your account and see IF i can help.

We may have to direct you to an accountant, if i deem there is no technical fault with the product, but we gotta start somewhere.

Welcome to the UK community page too :)

[Charlie999]

I'm the same. I'm employed and self employed and My Employment income more than takes up my Personal Allowance and its shown me as having a Tax of zero all year even though I have a fair sized Business Income so far. 

If I put in a made up entry to Make Net Profit £10,000 it show me tax of about £300! Surely that should be about £2000!

Did you get any joy on this from Direct Messages?

[Charlie999]

OK so I've been messing around with this today and it seems that if you set the Personal Allowance to other than Zero it doesn't calculate Tax until that figure is reached. In my case though and the author of this thread we have a PAYE income that's taking up this allowance. QuickBooks though seems to add this on again giving you double that allowance which is why I think my tax is so low!

Am I correct therefore in saying that if you do have a PAYE income that is more than your Personal Allowance you set it to £0 in QuickBooks? Even though thats not explained anywhere! I've also messed around with the Estimated Employment Income box and no matter what that value is I can't see anything different in the calculations! I've tested from £0 to £100,000 and it's always the same. 

[ARWMB40]

Sorry for late reply, no - nothing so far. 

[ARWMB40]

I tested your solution ( removing the allowance by changing it to 0GBP) and it improved income tax amount to a more reasonable level. NIC 2&4 is still showing 0GBP though. 

[Charlie999]

I'm not an accountant and this is my first year being self employed so don't know the rules yet but maybe you haven't earned enough generally to pay NIC. Add a TEST Income to see how things change as you add more and more. 

The way I have it setup now is to show My estimated PAYE earnings total but to have the Personal allowance as £0. Having the PAYE total I'm hoping will tell QB what Tax bracket to put me in and having Allowance as £0 will tell QB how much tax I will pay as my allowance has been used up already. 

Please anyone tell me if you think I'm wrong. Mind you I think I will find out at the end of the month when I file my return!!

[TaliaI]

Hello Charlie999,

If you are unsure about how you have this set up, we would advise to speak to an accountant as we are not accountant trained and so would not be able to suggest how to record this so it shows your tax correctly.

Thanks,

Talia

[Charlie999]

So let me get this right! This is a support site for accountant software and you say you can't answer the question because you are not accountant trained!

So what are we paying for then each month if no one can help with what I would suggest is a simple question!

[Rasa-LilaM]

Hi there, Charlie999.

Thanks for turning to the Community about tracking your earnings in QuickBooks Self-Employed. I'm here to point you in the right direction about tracking your business income and expense.

Based on the HRMC, if your personal allowance is up to £11,850, the tax rate will be 0%.  For self-employed workers, there are two types of National Insurance depending on their profits.

For example, if your profit is £6,205, you’ll be under Class 2. If you belong to the Lower Profits Limit and has earnings of £8,424, make sure use Class 4.

To help give you a better idea about Income Tax rates and Personal Allowances, check out these articles:

• Income Tax rates
• National Insurance contributions
• SA103F Categories

The information I provided should help you moving forward.

Stay in touch if you have additional questions about QBSE. I’ll be happy to keep helping. Wishing you the best.

[pcpatrick]

Hello,

I also have exactly the same problem at above. Please can you help me on this? It shows as no taxes need to be paid...

Please let me know how that works.

[JoesemM]

Hello there, pcpatrick.

QuickBooks will calculate your self-employment taxes based on your business income, spending, allowable expenses, and the information you have set up in your Tax Profile. Also, it is based on the HMRC on how they calculate the tax rate. As mentioned by my colleague above. For additional reference, you may check this article: QuickBooks Self-Employed UK Tax Profile Set Up.

Since there aren't taxes that need to be paid, I'd suggest contacting our Customer Support Team. They have more tools to check your account securely and provide more details about this.

Before diving in, please note that our live support is available M-F 6 AM to 6 PM and Saturday 6 AM to 3 PM PT. 

When you're ready, here's how to get started:

1. Click the Assistant button at the top.
2. Type Talk to a human.
3. Select your preferred support method: Message an agent (Live chat), Call an agent, or Get a callback.

You can also use your iOS device to connect with one of our live support. Please check out this article for additional details: Contact QuickBooks Self-Employed Support.

For more details about Income Tax rates and Personal Allowances, you can visit the articles shared by my colleague above.

You can also check our QuickBooks Self-Employed articles if you need help managing your financials and transactions in the program

Please let me know how the call goes or if you have any other issues. I want to make sure everything is taken care of for you. I'll be here to help. Have a good one!

[SKT252525]

The tax position is always zero, I have now tried 18 different combinations in the tax profile, none have made any difference whatsoever. I've even entered minus numbers in the personel allowance - still zero. I have conculded that Quickbooks Self Employed dosen't do tax. It's extermly good at everything else, but it just won't do tax.

[emmam6]

Hello Community Users, we just wanted to add some clarification onto this thread in regards to QuickBooks Self Employed and the income tax calculation.

If you are in full time employment as well as being self-employed it may mean you have used up the personal allowance amount. If so in QuickBooks Self Employed, you can remove the personal allowance amount in the tax profile and change it to zero it will then calculate the income tax based on your income and the fact you have no allowance left. Any questions let us know.