** NOTE HMRC updated their guidance to state they would not be issuing fines for late self assessment tax return submissions until 28 February 2021. However, the deadline of 31 January remained for payments. Late payments incur interest at 2.6%. HMRC urged customers to file their self assessment as soon as possible to allow sufficient time to apply for a Time to Pay arrangement to pay their tax bill should it be required.
A tax calculator can help you assess how much income tax you need to pay if you use self assessment. You can use a self assessment calculator to estimate future bills and when payment is due, so that you can arrange financing if needed. You can also use tax calculators to check payments for past tax years.
HMRC tax calculators for budgeting
If you are self-employed, you can use the HMRC self-employed ready reckoner to help budget for your tax bill. This calculator helps you estimate how much income tax and National Insurance will be due.
You'll need to have an estimate of your weekly or monthly profits, after taking into account any allowable expenses that you can deduct from your turnover.
GoSimpleTax makes your self assessment tax return quick and easy, helping you figure out which expenses and allowances you can claim.
If you are an employee (paid through PAYE), you can use an HMRC tax calculator to estimate tax based on your pay. This works out income tax and Class 1 (employees') National Insurance contributions.
You can get a more accurate estimate by logging into your personal tax account. If you get paid as an employee, this will show details such as your PAYE tax code. It will also provide estimates of your income for the current year and how much tax you will pay.
Other tax calculators
As well as HMRC's tax calculators, there are several other options available online. Examples include:
- this income tax calculator for employees which can handle details like pension contributions and offers both 'simple' and 'advanced' versions;
- this simplified tax calculator for the self-employed.
You can use calculators like these (and HMRC's own calculators) to estimate tax payments for the current tax year. Most calculators also allow you to check calculations for earlier tax years.
Bear in mind that any calculator will have limitations and cannot take into account your detailed personal circumstances. If you want a detailed picture of your self assessment tax liabilities, you should take advice from your accountant, particularly if you are self-employed.
Calculating self assessment tax bills
You must have an accurate calculation of how much tax is due so that you can make the right payments.
- If you use HMRC's Self Assessment online service, tax calculations can be handled automatically.
- You can 'view your calculation' once you have completed the details in the return but before you submit the return.
- Once you have submitted the completed return, your final tax calculation should be available in your online personal tax account within 72 hours.
- If you choose to complete a paper return, HMRC sends your tax bill to you in the post.
- You may find it easier to use commercial tax return software to help you prepare and file your tax return.
Your online tax account can also show you details of previous year's tax bills and how they were calculated.
Self assessment payment dates
As well as calculating tax and National Insurance payments, your bill will show when payments are due.
- You normally make two payments on account towards your tax bill: by 31 January (during the tax year) and by 3 July (after the tax year ends). Each of these payments on account is half of your previous year's tax bill.
- You don't have to make payments on account if your last self assessment bill was less than £1,000, or if you have already paid more than 80% of your tax bill (for example, because most of your tax is deducted through PAYE).
- A balancing payment, due by the following 31 January, adjusts for the difference between your payments on account and the tax you actually owe.
- If you pay tax through PAYE and complete your self assessment tax return on time, you can ask for any extra tax you owe to be collected through PAYE. This can only be done if the total you owe is less than £3,000.
If you know your tax bill is going to be lower this year than last, you can ask for your payments on account to be reduced. But if you end up having to pay more, you will be charged interest.
Capital gains tax calculators
You may need to pay capital gains tax (CGT) if you sold assets and made a gain greater than the annual exempt allowance (£12,300). You can use HMRC tax calculators to work out how much taxable gain you have, and what CGT is payable:
Income tax for a previous year
You may want to check how much tax you should have paid in a previous year – for example, to ensure that you have not paid too much.