I am new to self-employment. I have completed my return for last year and paid the income tax national insurance due but in the new tax year I’m about to enter can I include this cost of national insurance and income tax as an allowable expense in my profit and loss account when calculating the New Year’tax due?
Hi @Mhill
We’re not accountants so it’s always worth checking with a registered accountant to be sure.
Generally speaking things like income tax and national insurance aren’t allowable expenses for sole traders. If they’ve been paid from a business bank account they would be classed as “drawings”.
Hi, no, these are personal expenses not business expenses so you can’t include them when calculating your taxable profits.
Thank you I thought that might be the case.
Your self employed profits (or losses) are one of the things that goes towards the calculation of how much income tax and NI you owe, but so is savings interest, employment or pension income, allowances and tax reliefs, etc etc. - two people with exactly the same bottom line P&L in QuickFile could owe wildly different amounts of tax and NI depending what else went into their calculations.
The final calculated liability is for you as an individual, it’s not directly attributable to just your QuickFile profits.
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