Allowable tax and the 40% rate

Backpackant · ‎April 10, 2025

Am I doing something wrong here?

I am a full time PAYE employee, so my £12570 is already taken up. My income is around 38k and change.

My self-employed income is 14k with around 2k of allowable expenses, making it £11457, so a total of less than 50k, which is when I should start paying the 40%.

But QB self-employed is telling me to pay £4583 on my £11457 which is 40%.

In my profile, I have omitted the £12570 personal allowance. When I enter it, and answer the question "Have you received or sent transfer allowance amount?" whatever I answer returns an income tax amount of either £4583 or zero.

I'm confused. What have I done wrong?

NicoleAscencionS

I appreciate the details you shared regarding your expenses and income, Backpackant. Yes, you can enter the net figure amount. Allow me to provide more insights about this matter.

It's important to double-check your tax setup to ensure all details are correct. Since your allowable expense is already accounted for, enter zero for the personal allowance and use your net self-employed income when setting up your tax.

Moreover, I recommend reaching out to HMRC or a tax advisor for further guidance.

Additionally, to ensure you have all the necessary information for your tax return, you can download the tax summary and details.

Managing multiple income sources can be challenging, and ensuring your tax calculations are accurate is our top priority. Feel free to return to this thread if you have additional tax setup questions.

View solution in original post

Backpackant

Additional note about the above, the 38k PAYE income I mention is gross, inclusive of the £12570 allowance. Should I be entering a net figure, or maybe ~26k after deducting the allowance?

NicoleAscencionS

I appreciate the details you shared regarding your expenses and income, Backpackant. Yes, you can enter the net figure amount. Allow me to provide more insights about this matter.

It's important to double-check your tax setup to ensure all details are correct. Since your allowable expense is already accounted for, enter zero for the personal allowance and use your net self-employed income when setting up your tax.

Moreover, I recommend reaching out to HMRC or a tax advisor for further guidance.

Additionally, to ensure you have all the necessary information for your tax return, you can download the tax summary and details.

Managing multiple income sources can be challenging, and ensuring your tax calculations are accurate is our top priority. Feel free to return to this thread if you have additional tax setup questions.

Backpackant

Thanks very much for that. I'll have everything checked before committing the numbers to HMRC.

Topics

Training

Community

Resources

Allowable tax and the 40% rate