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Corporation Tax Provision Calculator

Corporation Tax Provision Calculator

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Dividend Calculator (Excluding VAT)

Dividend Calculator (Excluding VAT)

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Dividend Calculator with VAT Flat Rate Scheme

Dividend Calculator with VAT Flat Rate Scheme

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Dividend Tax Calculator 20/21

Dividend Tax Calculator 20/21

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Income Tax Calculator

Income Tax Calculator

What is income tax?

Income tax is a tax imposed on the income or profits made by individuals in any given tax year. While this is typically deducted at source for employees, self-employed persons pay income tax differently and may be taxed a different amount.

What is the current self-employed income tax rate?

Income tax rates for the 2019/20 tax year are as follows:

  • Personal Allowance: Up to £12,500 (0%)
  • Basic rate: £12,501 to £50,000 (20%)
  • Higher rate: £50,001 to £150,000 (40%)
  • Additional rate: over £150,000 (45%)

If you need more information on Personal Allowance and income tax rates for previous tax years, check out the following guides from HMRC:

Paying income tax as a self-employed person: What you need to know

Unlike employees, self-employed individuals don't pay income tax through PAYE-they're required to file an annual Self-Assessment tax return.

Most people file their returns online these days. The deadline for doing so is 31st January, while payments for your tax bill are due on 31st January after the end of the relevant tax year. That means that your 2018/19 tax year must be paid up by 31st January 2020.

If you're newly self-employed, you'll need to register for Self-Assessment. Keep in mind to stay within the deadline, as there are penalties for registering your Self-Assessment late. We explain more about key deadlines, as well as late filing and payment penalties in our Self-Assessment guide.

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Inside vs Outside IR35 Assessment Calculator

Inside vs Outside IR35 Assessment Calculator

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Limited Company vs Sole Trader Calculator

Sole Trader vs Limited Company

Sole Trader vs Limited Company

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Standard vs Flat Rate VAT Scheme Calculator

Standard vs Flat Rate VAT Scheme Calculator

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Switch from Standard VAT to the Flat Rate VAT Calculator

Switch from Standard VAT to the Flat Rate VAT Calculator

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Take Home Pay Calculator: Limited Company outside IR35

Take Home Pay Calculator: Limited Company outside IR35

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Use of Home Allowance

Use of Home Allowance

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iPhone about to calculate VAT

VAT Calculator

VAT Calculator

Working out the VAT

With our calculator, you can work out your VAT in just a few quick clicks.

If the price doesn't include VAT:

  • Select the ‚ÄòAdd VAT' option
  • Select the rate of VAT on the slider
  • You'll obtain the gross price (inclusive of VAT) and the VAT element of the bill.

If the price includes VAT:

  • Select the ‚ÄòExclude VAT' option
  • Select the rate of VAT on the slider
  • You'll obtain the pre-VAT price (exclusive of VAT) and the VAT element of the bill.

VAT basics: What you need to know

VAT, or Value Added Tax is a consumption tax that is applied to most goods and services. While the standard rate (20%) applies in most cases, there are items-such as children's car seats and sanitary products-that are charged at the reduced rate of 5%. Using the slider on our calculator, you'll be able to calculate the VAT and gross or net prices for different VAT rates. If you're unsure about the correct rate you should apply, refer to HMRC's resource on VAT rates.

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accounting terms guide

31 Accounting Terms & Concepts You Need to Know

31 Accounting Terms & Concepts You Need to Know

Whether you're self-employed or running a small business, you need to stay on top of your business finances.

While you can delegate your company's financial affairs to your accountant, it's still important to have a good grasp of the essentials-such as basic accounting terms and concepts. With this knowledge, you'll be better able to communicate with financial professionals, team members and potential investors.

To help you get started, we've written up an introductory guide to accounting terms you need to know:

Accounts payable (AP)

This refers to money owed to the business by its creditors (suppliers, vendors and other service providers). These are recorded as a liability on the balance sheet.

Accounts receivable (AR)-

This refers to money owed to the business by its debtors (clients and customers). The amounts are recorded as an asset on the balance sheet.

Accruals

Accruals are amounts that are unaccounted for at the end of the accounting period. These can be expenses that have been incurred or revenue that has been earned, but aren't yet recorded in the accounts.

Assets

Any resource that is owned by a company. There are two main types of assets: current assets and non-current assets. Current assets are expected to be consumed within a year, while non-current assets are expected to be held for longer than a year.

Balance sheet-

The balance sheet shows how much a business owns (assets), owes (liabilities) and the amount that is left over for its owners (owner's equity) at a point in time.

Cash flow

Cash flow refers to the total amount of money that is moving in and out of your business.

Chart of accounts

The chart of accounts is a listing of all the accounts used in the general ledger of the business.

Cost of goods sold (COGS)-

The total of all costs associated with producing your products or services.

Credit

An accounting entry that increases a liability or owner's equity account, or decreases an asset or expense account. The term may also be used to refer to an entry on the right side of a T-account.

Debit

An accounting entry that increases an asset or expense account, or decreases a liability or owner's equity account. The term may also be used to refer to an entry on the left side of a T-account.

Depreciation

The measurement of the decline in the worth of an asset.

Common methods of depreciation include: straight line, units of production, sum-of-years-digits and double-declining balance.

Dividends-

Dividends are a payment of profit that a limited company distributes to its shareholders.

It is the money remaining after all business expenses and liabilities, as well as outstanding taxes (including VAT and Corporation Tax) have been paid off.

Generally Accepted Accounting Principles (GAAP):

In the UK, the GAAP is a set of accounting standards published by the UK's Financial Reporting Council (FRC) for reporting financial information.

General ledger

A record of all the accounts that a business uses.

The accounts are classified into three categories: assets, liabilities and equity accounts.

Profit & loss (P&L)

The P&L is a financial statement that shows how much money your business has made or lost.

Liabilities

Debts and obligations of a company.

There are two main types of liabilities: current liabilities and non-current liabilities. Current liabilities (otherwise known as short-term liabilities) are due within a year, while non-current liabilities are due after a year.

Equity

Equity can have several meanings in accounting.

Firstly, it refers to the net amount of finances an owner has invested in the company.It can also refer to the residual value of assets less liabilities, as represented by the accounting equation ‘Equity = Assets - Liabilities'.

Expenses

Costs incurred by a company for revenue generation.

A few common types of expenses a business may incur are:

  • Fixed expenses: The total amount of the expense doesn't change over the short-term, despite changes in sales volume or other business activities. Examples include lease and rent payments.
  • Variable expenses: As its name suggests, the total amount of the expense varies in proportion to changes in sales, production or other business activities. Examples include salaries, utility expenses or costs of raw materials.
  • Operating expenses: Expenses incurred for activities that aren't directly related to the production of goods or services. Examples include administrative expenses, or legal and financial fees.

Net income

Otherwise known as net profit, net income refers to a business' financial position when the total revenue is more than the total expenses.

Present value (PV)

Present value is a calculation that measures the current value of a sum or stream of money to be received in the future, through adjusting for inflation and interest.

Return of investment (ROI)

A metric of profitability used to measure the gain or loss that an investment generates, relative to the sum of money invested.

Revenue

The amount of money a company receives from selling its goods or providing its services.

It refers to the amount earned before expenses are deducted.

Trial balance

A trial balance is a report that lists the balances of all general ledger accounts of a business at a specific point in time.

An expense should be recorded in the same period that the related revenue is earned.

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self employed accounting software guide

5 Key Benefits of Accounting Software when Self Employed

5 Key Benefits of Accounting Software when Self Employed

As a self-employed person or small business owner, sing a spreadsheet to manage your accounting may once have sufficed in the initial stages of running your business.

But as your company grows, the following occurs: your financial data becomes increasingly complex, you're adding on new accounts and you may be bringing on additional staff. You now require a scalable solution-and you're wondering if it's time to transition from spreadsheets to accounting software.

If you're still on the fence, and unclear about the value that an accounting software brings to your business, here are five key benefits you'll reap if you make the switch:

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small business bookkeeping guide

Beginner's Guide to Bookkeeping for Small Business

Beginner's Guide to Bookkeeping for Small Business

Starting a new business?

Bookkeeping requirements are unlikely to be at the forefront of your mind. At this stage there are more pressing things for you to think about.

However, once your business is taking shape, you will need to start thinking about keeping up-to-date and accurate accounting details of your income and expenses. But what kind of records do you need to keep?

More than just a legal requirement, basic bookkeeping is an essential part of your ability to manage your business effectively.

Every year, your business accounts will need to be completed. If your business is operating as a limited company, you will need to submit your company accounts to Companies House. If you are self-employed, your business accounts will be used to calculate your Self Assessment tax liability.

Your bookkeeping records will form the basis of these statutory financial statements. They should include information relating to your sales, your expenses, salaries of you and any employees, along with other bank transactions.

It might sound complicated, but take it one step at a time and it's actually quite manageable.

If you're really struggling to stay on top of it all, there are plenty of small business accountants and professional bookkeepers who will be happy to help. So, even if you're terrified of numbers, rest assured that there's a solution out there for you.

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bookkeeping vs accounting guide

Bookkeeping vs Accounting Differences

Bookkeeping vs Accounting Differences

As a small business owner, having a good grasp of your business financials is key-even if you've hired an accountant.

While you can delegate your accounting tasks, understanding the basics will place you in a better position when it comes to discussing your business finances with your team members, financial professionals or potential investors.

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Previously, we've explained about the top accounting terms and concepts you need to know. In today's post, we'll explain the differences between bookkeeping and accounting. While these two terms are often used interchangeably, they refer to two vastly distinct functions and roles.

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accounting mistakes guide

5 Common Small Business Accounting Mistakes & How to Fix Them

5 Common Small Business Accounting Mistakes & How to Fix Them

A broad swath of small business owners are tackling the myriad tasks required to pay bills, invoice customers, cut checks to employees and contend with past-due accounts, among other accounting tasks.

While that might work for very small businesses, it often opens the door for firms to make accounting mistakes that undermine their growth and siphon precious time and mental focus from other important areas of their business.

Here are five accounting mistakes that can derail growth for small businesses and how to avoid them.

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tax returns deadline guide

Company Filing & Deadlines: Self Assessment, VAT, Accounts, Tax & more

Company Filing & Deadlines: Self Assessment, VAT, Accounts, Tax & more

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company accounts guide

Your company year end accounts explained

Your company year end accounts explained

Approaching a company's first year-end can feel incredibly stressful, as there will be a lot of paperwork you need to file at this time.

In this article we provide you with a simple list of what you will need to do, along with a few tips to make the whole process easier for you. We finish with the penalties and deadlines for late filing.

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business budget guide

Creating your business budget

Creating your business budget

Running a business involves catering for many aspects of the business that can bog you down.

You can even forget crucial roles, such as monitoring your small business finances. Although budgeting may not be the best and most exciting part of running an enterprise, it is fundamental for success.

When starting a new business, a budget is a vital part of your business plan. Once the business is open and operational, then budgeting becomes an essential exercise that takes place annually or quarterly.

A budget comprises of fixed and variable costs accompanied by the allocation of monies to reflect business objectives.

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Accounting Software Comparison Guide

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Complete IR35 Guide

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Small Business Accounting Guide

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