TAX for the Self-Employed Optician (UK) (2024)

FAQs

TAX for the Self-Employed Optician (UK)? ›

Tax considerations for self-employed opticians

Key Takeaways. If you're self-employed, you're responsible for paying both the employer and employee portions of your Social Security and Medicare tax—a total of 15.3 percent on 92.35 percent of your net earnings from self-employment. Use Schedule SE to calculate your self-employment tax.

This guidance sets out the VAT treatment of supplies of goods and services made by opticians and how VAT can be reclaimed. Generally, optical services are exempt from VAT. However, the supply of goods, such as spectacles, is taxable. Opticians typically make mixed supplies of exempt services and taxable goods.

HMRC are very clear on the rules around eye-related expenses. You can claim the cost of an eyesight test, and even any corrective glasses. There are conditions to this: Corrective glasses are made generally available to all employees; and.

The deadline is January 31st of the following year. You pay £2,054 (20%) on your self-employment income between £0 and £10,270. You pay £7,092 (40%) on your self-employment income between £10,270 and £28,000. You will also have to pay £616 (6%) on £10,270 of your self-employment income.

Simply being self-employed subjects one to a separate 15.3% tax covering Social Security and Medicare. While W-2 employees “split” this rate with their employers, the IRS views an entrepreneur as both the employee and the employer. Thus, the higher tax rate.

You usually must pay self-employment tax if you had net earnings from self-employment of $400 or more. Generally, the amount subject to self-employment tax is 92.35% of your net earnings from self-employment.

The self-employment tax rate is 15.3% of net earnings in 2024. That rate is the sum of a 12.4% Social Security tax (also known as OASDI tax) and a 2.9% Medicare tax on net earnings. Self-employment tax is not the same as income tax.

You can accomplish this by seeking to maximize tax write-offs through your business. Maximizing write-offs directly reduces the income subject to self-employment tax. As a self-employed individual, the tax law allows you write-off all ordinary and necessary expenses to conduct your trade or business.

Are eye glasses a tax deduction? ›

You can deduct the costs for prescription eyeglasses and eye exams on your tax return. But they must be a part of your itemized medical deductions, which need to exceed 7.5% of your adjusted gross income.

The money spent on reading or prescription eyeglasses can be considered a tax-deductible medical expense. By categorizing glasses under "medical expenses" and itemizing deductions on form 104, Schedule A, you may be able to lower your tax burden.

Sight test services are exempt from VAT, while spectacles, frames and lenses are subject to VAT. Some practice owners prefer this method as it simplifies the calculations for them and provides a clear record of both types of income stream exists.

The Specsavers Group of companies make a significant contribution to both the healthcare industry and the economies of all the territories in which we operate, paying taxes in accordance with applicable legislation.

Employers only have to pay for glasses for DSE work if the test shows an employee needs special glasses prescribed for the distance the screen is viewed at. If an ordinary prescription is suitable, employers do not have to pay for glasses.

You'd have to pay taxes on the health insurance plan provided by your employer. However, personal policies are exempt from taxation as a general rule.

The law sets the self-employment tax rate as a percentage of your net earnings from self-employment. This rate consists of 12.4% for social security and 2.9% for Medicare taxes. The maximum amount of net earnings subject to the 12.4% social security portion of the self-employment (SE) tax for 2023 is $160,200.

So how much do I need to earn to file a tax return? As a general rule, if you earn more than £1,000 of untaxed income during a tax year, you will have to do a tax return.

With that in mind, it's best practice to save about 25–30% of your self-employed income to pay for taxes. And, remember, the more deductions you find, the less you'll have to pay.

As a sole trader, you must pay income tax based on the profits of your business. You'll start paying income tax once your profit goes above your personal tax allowance, which is £12,570 in 2023.