A tax refund is based on your turnover, the amount of tax that has been withheld and the level of expenses that are set against the business turnover.
A lot of tax rebates are for people working within the CIS industry. CIS subcontractors get taxed at 20% on all of your earnings.
If you earned more money in the last tax year, you will have had more tax deducted. However, the overall amount of tax that you will actually end of up owing will be higher. If your profit exceeds £50k, the proportion of profit above £50k will be taxed at 40%.
How your tax return is worked out.
Turnover or money earned £55000
Allowable business expenses £15500
Net (Profit) £39500
Tax deducted at 20% £11000
Personal Allowance £12570
Income of which tax is charged £26930
Tax due £5356
Class 4 National Insurance £2684.70
Class 2 National Insurance £163.80
TOTAL TAX/NI £8234.50
TAX REBATE DUE £2765.50
Your rebate will be affected by how much your turnover is and the expenses you can claim for. The more expenses that are claimed, the lower your tax liability is, therefore if you are taxed at source, the higher your rebate will be. Contact us to get the help you need when you need it.