Are NI class 4 payable on my gross pension

As self employed in my last short year April - June 2008 I know that the Net
Profits just over £20,000 are subject to NI Class 4 at 8% and then tax at
22%.
But I have been getting a past employment pension of £1,000 per month, for 8
months now, paid gross so will this be taxed at 22% and then subject to NI
Class 4 at 8% as well?
Confused - Ken
Reply to
Ken
BR Tax is 20% for 08-09. Don't forget to check if you have overlap relief upon cessation.
Taxed at 20%, but no NI at all at all.
Reply to
Martin
Yes, but the 2008-2009 income tax rate is 20%, not 22%, and the first £5435 of self employed profits are not subject to NI.
It will be taxed at 20%.
NI does not apply to "all income of self employed persons", but only to earnings from self employment, so pensions, like savings interest, are not subject to any NI.
And of course the first £6035 of the year's total income (unless your personal allowance is different) is not taxed at all.
Reply to
Ronald Raygun
Martin thanks for your fast answer so I can now restart my calculations with what I owe the tax man although just realised my January tax payment I made was wrong. I mistakenly paid the January 2009 and July 2009 together so the tax man owes me some!!!
Ken
Reply to
Ken
.... but presumably 20% tax has already been deducted at source, so unless total taxable income pushes you into the HR band, it shouldn't affect your sums (even though it still has to be included in your SA Return)
Until recently, you would have got a bit of interest on your early payment of the July 2009 POA. But did you check whether you have scope to reduce your 08-09 POAs, given your short trading period and hence (presumably) reduced profits compared with 07-08?
Reply to
Martin
Thanks for your further advice. I am meeting my accountant tomorrow to sort matters out. I was forced to stop trading due to ill health and as part of that my brain is very mushy and so I am making cock ups. Hopefully he will put me straight so then I can carry on being retired and take up pruning the roses :-)
Reply to
Ken

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