Basic Sole Trader Income Tax Calculation

This article explains the use of the Income Tax sheet within the Basic Sole Trader package.

The Income Tax sheet in the Basic Sole Trader package just focuses on the business side of things so it's is only an indication of your bill.

If you have more complex circumstances you could just ignore it and leave a pessimistic allowance in your drawings until file your return.

When filing your tax return the DIY Accounting package will help you complete the Self Employment supplement, then you'll get the exact amount of tax to pay HMRC after completing other sections for personal circumstances and PAYE income.

It is possible to adjust the Income Tax calculation:  

  • Stop NI calculation: Enter 0 in cell E16 and E16  
  • Additional PAYE income up to 9440: Reduce the personal allowance (cell E6) by the amount earned up to 9440  
  • Additional PAYE income over 9440: Reduce the lower limit of the 40% band (cell C9) by the amount earned above 9440

These steps permanently alter the formula, take a backup if you are unsure if you want to make the changes.


All Articles