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Why my income Tax is 0?

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?

9 REPLIES 9
QuickBooks Team

Re: Why my income Tax is 0?

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 :)

Frequent Explorer *

Re: Why my income Tax is 0?

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?

Frequent Explorer *

Re: Why my income Tax is 0?

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. 

Not applicable

Re: Why my income Tax is 0?

Sorry for late reply, no - nothing so far. 

Not applicable

Re: Why my income Tax is 0?

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. 

 

 

Frequent Explorer *

Re: Why my income Tax is 0?

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!!

QuickBooks Team

Re: Why my income Tax is 0?

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

Frequent Explorer *

Re: Why my income Tax is 0?

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!

QuickBooks Team

Re: Why my income Tax is 0?

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:

 


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.