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The United Kingdom salary and tax section provides guides, information and calculators to help you understand the way tax and accounting systems work in the UK. This section is particularly useful for business start-ups, entrepreneurs, business owners, self-employed and employed individuals though it can be used by anyone who wishes to improve their knowledge of the taxation system in the UK and relevent accounting approaches used.
More importantly, the section contains supporting online income tax calculators, capital gains tax calculator, corporation tax calculator, salary calculators and other good calculators which can be used to calculate various tax commitments, covering both employee income tax and business payroll commitments. In addition, online business tax calculators are provided for the computation of various business taxes including Value Added Tax (VAT) and Corporation tax.
The United Kingdom tax and salary section is broadly split into six sections each with dedicated calculators and tools, these are:
All income tax, payroll taxes and business taxes are based on the latest UK tax tables and tax law provided by HMRC (Her Majesty's Revenue & Customs). HMRC is responsible for taxation on the UK and runs the tax year from 6th April to 5thApril the following year, for example 6th April 2024 to 5th April 2025. You can check the latest UK tax rates and thresholds used in our online tax and salary calculators if you wish to validate or query a specific tax rate, threshold or allowance.
Each tax calculator, salary calculator and salary example etc. includes a breakdown of how to calculate the specific tax applied or allowance used and has the full workings out as well as guides on the tax formula used. Our aim being to provide clear information so that you understand how specific UK tax laws are applied and increase your knowledge of tax and salary calculations so that you understand your tax commitments as an employee, employer or contractor in the UK. You can then of course complete your own UK salary and tax calculations or access the free online calculators on iCalculator whenever you need them in the future or compare your salary the to the average salary in the UK in 2024.
Most income tax in the UK is deducted using the Pay As You Earn (PAYE) system. PAYE works by calculating an annualised salary based on your payroll period and taxable income for that period. Deductions are then taken in equal amounts each and every time you are paid, the aim being to provide tax payments to HMRC quickly and balanced over the financial year for the employee. The employee payroll section includes salary calculators, guides and examples that provide a clear illustration of payroll deductions and options for reducing the amount of PAYE income tax paid by using legal income tax avoidance opportunities such as salary sacrifice.
The employer payroll section includes similar tools and calculators to the employee section with the addition of employee specific guides and illustrations. For example, the total cost of employee, salary package calculations and specific calculators for employers National Insurance.
On the 6th April 2016, new separate tax laws were introduced which changed the way income tax is calculated in Scotland. The way income tax in Scotland is calculated has involved since then. In order to support our community in Scotland more effectively, we introduced a dedicated section for Salary and income tax calculations in Scotland which includes details of how to calculate income tax in Scotland.
The contractor section of iCalculator provides relevant information for contractors who setup their own limited company or use the services of an Umbrella Company. This section is also particularly useful for new contractors who are unsure of whether to go ltd or use the services of an Umbrella Company. There are a plethora of useful contractor calculators and contractor guides to help new contractors choose the right option to suit their immediate contract and potential contracting career.
Self Assessment has been provided its own dedicated section on iCalculator due to the number of areas it encompasses. Self Assessment can basically be completed by any UK taxpayer though it is only mandatory for individuals who meet certain criteria. Completing a Self Assessment tax return can however be beneficial to a lot of people, particularly if you give to charity, have a private pension or other expenditure which is exempt from income tax.
The UK business tax section of iCalculator contains tax calculators and tax guides which provide clear details of business tax responsibilities with a view to helping business owners successfully manage their company in the UK.
The Miscellaneous tax section contains calculators, guides and tools that fall outside of the five main tax categories. These include projected tax calculators (published for example when a party suggests a change in tax law, the aim herein to allow comparison of old to proposed tax law), tax calculators for dedicated scenarios, like landlords and topics which relate to UK tax in general.