What would be the total tax payable on earnings of 拢120'000?

My brother is self employed, and has asked me roughly yo work out his tax liability for 07-08, of course come January he will use his accountant, but for now, just wants a rough idea

40%

what a rubbish answer

You have a tax free allowance, you have some at 20%, some at 40% .... less nat insurance over something like 57'000

such a vague, useless answer

A bit more detail would help but I can give you a rough guide.

Tax for self employed trading is calculated on net profit and not on income. Assuming in your brothers case he has a net profit of 拢120,000 (after all expenses are deducted); the first 拢5,435 is tax free, the next 拢36k is taxed at 20% and thereafter at 40% giving him a total tax bill of 拢38,626.

He will also need to pay class 2 National Insurance at 拢2.30 per week and class 4 National Insurance at 8% of net profit between 拢5,435 and 拢40,040 and 1% over that.

Hope this helps.

It will be roughly 拢38,626.

Its worked out as follows -

拢5435 x 0% tax (personal allowance)
拢36,000 x 20% tax
拢78,565 x 40% tax

Hope this helps!

edit. it might also be worth pointing out to him that he will have to pay roughly 拢10,700 in National Insurance. This is in addition to the tax figure above and is also extra to the 拢2.30 per week he will be paying in class 2 national insurance. This information is all based on trading profits of 拢120,000.

well you aren't going to get any exact figures from me if your attitude is "What a rubbish answer". Ever heard of a tax book?

Hi tax would be 40% then there is national insurance on top rough guide is around 51% with ni included