Tx notes fa22 Final

3.2.
 
Class 4 contribution 
(a)
The self employed also pay Class 4 contributions which are based on the assessable trading 
profits of the tax year.
(b)
The rate of Class 4 NIC is nil up to £12,570 and is 10.25% and is payable on trading income 
between £12,570 and £50,270.
(c)
For trading income in excess of £50,271, a rate of 2% is payable.
(d)
Contributions begin if the employee is 16 at the start of the relevant tax year but contributions 
cease, when the taxpayer reaches pensionable age at the start of the relevant tax year.
 
Example 2
 
 
Jerome, a trader, has a trading profit assessment of £60,000 for 2022/23.
Calculate his Class 4 NIC and Class 2 NIC for 2022/23 
You may now attempt Practice Question 18


£
Company motor car
6,400
Fuel
4,320

---

99
Only on 
OpenTuition
you can find: Free ACCA notes 
•
Free ACCA lectures 
•
Free ACCA tests 
•
Free ACCA tutor support 
•
The largest ACCA community
June 2023 to March 2024 exams
Watch free ACCA TX lectures
Chapter 12
CAPITAL GAINS TAX – INDIVIDUALS 
1. Individuals and Companies 
Individuals are subject to Capital Gains Tax (CGT) on their chargeable gains arising in the tax year. 
The chargeable gains of a company however, are included on the company’s Corporation Tax 
Computation along with its taxable income and the company’s overall taxable total profits are then 
subjected to Corporation Tax, as you will see later in these course notes. 
A chargeable gain or allowable loss arises on a 
๏
chargeable disposal of a 
๏
chargeable asset by a 
๏
chargeable person.
The basic calculation of the chargeable gain is a simple one, deducting the allowable costs of an 
asset from its net proceeds upon its sale. A company NOT an individual may then further reduce any 
gain for the e
ff
ects of inflation by the deduction of Indexation Allowance - a relief for the e
ff
ects of 
inflation (see Chapter 19).