As a sole trader, do i calculate tax based on my revenues before i pay staff wages, or after?
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It's after. On your Tax Return you enter turnover (gross profits) in box 14, and employment costs in box 18. Other expenses can be entered in appropriate boxes. Your tax is calculated on your net profit (box 46), expenses being taken away from turnover.
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Other Answers (7)
- After all allowable business expenses.
This includes wages, stock, materials, bills like phone.
Basically anything that you can get away with deducting.
Don't listen to that fool who said its the top end figure!!!! It is ALWAYS the net profit figure ALWAYS
I am an accountant so I know this for a fact. If you want some more detailed advice I would be more than happy to help. My email is on my contact page
Jan409 you are totally wrong! A sole trader can employ as many staff as they want. They are the only person that owns the business and have unlimited liability for all the debts a business incurs.0% 0 Votes
- ringoireland is 100% correct, including his comments about some other wrong answers.
I would also add, contrary to some answers, that there is no need at all to use a qualified accountant. If you business is small and you have the time it is perfectly possible to do it yourself.
But, depending on your circumstances it may be advisable to use an accountant. They may well more than pay for themselves by identifying additional reliefs and deductions that you can use.0% 0 Votes
- Can I just say,that you can't be a sole trader if you employ staff
A Sole Trader,is a person who operates the business on his/her own
with no partners, and no staff
Having said that, you pay tax on your net profit, after all expenditure
has been taken into account, and after you have taken off your tax allowance
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- As ringoire has said, the tax is worked out on the net profit... But as a sole trader yourself, you wouldn't work out the tax anyway. You need an accountant to do this for you.
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- You pay an accountant to sort it out for you.
The bankruptcy courts are full of people who thought they could sort these things out themselves.33% 1 Vote
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