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How Do You Work Out Your Tax And Insurance?

How to work out tax, national insurance etc?

  • My wife is about to become a driving instructor. As you can imagine she is very excited and I am too, but in the back of my head I am concerned about the tax national insurance etc. ...show more

  • Answer:

    The driving instructor is a separate business in itself, on the tax return it gets a Self Employed page. The costs - car, fuel franchise fees all get marked down - total earnings minus costs = profit. Part time job will use her personal tax allowance £9440 this year - if she earns less than £9440 in the employed work then there will be allowances to carry over (the online tax return does the calculation for you). Profit plus pay = gross income Gross income minus personal allowance = taxable income Taxable income up to £35000 is taxed at 20% this year.Over that and it is 40% TAX

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You will need to notify HMRC that you are liable for tax and you have 12 weeks to do this from when you start work as a driving instructor. You can do this online, or by calling them. The good news is that as a driving instructor there are many expenses that can be claimed against taxable income. The following list is not exhaustive but gives an indication of the general expenses that can be claimed: Motor fuel, parking and tolls, car cleaning, franchise fee, postage & stationary, computer consumables, continuing professional education (not initial training costs*), bank charges on a business account, telephone/mobile phone charges, accountancy charges. Your fanchise company should be able to help you. Hope this adds to the other answers you have had. Good luck with the new career!

Laura

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