Listen To The Taxman

The taxman is a colloquial reference for HMRC, the UK government organisation charged with collecting taxes.

To calculate what the taxman keeps from your salary simply enter your gross salary below:




Pro Rata Salary Calculator

Our pro rata salary calculator will work out your take home pay and tax. Simply enter your annual salary below to find out what it is on a pro rata basis (hourly, daily, weekly and monthly).

Pro rata, often hyphenated as pro-rata, simply means in proportion to. So for full time employees with an annual salary looking to find out what their monthly, weekly or day rate is then use our pro-rata salary calculator.

Our pro rata salary calculator takes your hourly, weekly, monthly or annual salary and converts it on a pro rata basis, that is proportionally, into all possible timings for a salary i.e. hourly, weekly, monthly or annual salary.




Online tax return

There are several types of online tax returns filed to HMRC although the most common one is the SA100, often referred to as online self assessment. This is an online tax return for individuals paying income tax.

The tax year in the UK for individuals starts on the 6th April and continues through to the 5 April. The deadline for filing an online self assessment tax return is the 31 January following the end of the relevant tax year.

By way of example, for the tax year that starts on 6th April 2017 and ends on 5th April 2018 the relevant online tax return would need to be filed on or before 31 January 2019.

To find out more about individual returns visit HMRC to file an online tax return.

There are other types of online tax returns in addition to the SA100. The full list includes:

  • SA100 (individuals)
  • SA800 (partnerships)
  • SA900 (trusts and estates)
  • CT600 (companies)
  • P35 (employers)
  • VAT100 (value added tax)

 

HMRC

HMRC is a UK government organisation responsible for collecting taxes. Its full title is Her Majesty’s Revenue and Customs, and colloquially the organisation is known as the ‘taxman’.

On 18th April 2005 the Inland Revenue merged with Her Majesty’s Custom and Excise to create what is now HMRC.

Some of the taxes HMRC collects and its areas of responsibility include:

  • Income tax
  • National Insurance
  • VAT
  • Corporation tax
  • Capital gains tax
  • Motoring taxes
  • Inheritance tax
  • Stamp duty
  • Insurance Premium Tax
  • Air Passenger Duty
  • PAYE

Top 5 tips for small business grant applications

Eligibility

There are lots of small business grants available but often eligibility is limited to specific geographic regions, industries or the business applying for a grant has to qualify based on thresholds for revenue or employee numbers. Check the eligibility criteria.

Funding gap

Government grants or local authority grants are often match funded. That means the grant is only for a portion of the total project cost. The small business applying for the grant must therefore fund any difference itself.

Details

Unfortunately, no one is going to just hand over funds on a whim. You need to take your time and put the effort into submitting a robust application. Get the details right.

Advice

Accountants and patent lawyers, although an added cost, will help ensure that your case for a grant stacks up which will increase the likelihood of success.

Patience

Grant applications are not an overnight decision for the organisation awarding the grant. Public sector organisations need to do their due diligence and be fair to all applicants so the decision making process can take time. Be patient.

Next steps

Check out the government’s comprehensive list of finance and support for your business.

Income tax

Income tax is simply a tax on an individual’s earnings. An individual’s earnings are typically either income from employment or profits from being self employed.

Other forms of income are also subject to income tax including:

  • Dividends
  • Savings interest
  • Rental income
  • Employee benefits
  • Pensions
  • State benefits

Some forms of income are specifically excluded from an income tax liability including:

  • Individual Savings Accounts (ISAs)
  • National Savings Certificates
  • Premium bonds
  • National Lottery winnings

Income tax was introduced in the UK in December 1798. William Pitt the Younger needed to pay for weapons and equipment in preparation for the Napoleonic Wars.

Income tax is collected by HMRC, a government organisation responsible for collecting all taxes in the UK.

National Insurance contributions

National Insurance contributions are a deduction from an employee’s salary.

Commonly abbreviated to NICs, National Insurance contributions qualify an employee for certain benefits such as the State Pension.

An employer will make National Insurance contributions to HMRC on behalf of the employee each payroll period through PAYE.

Self employed workers pay National Insurance contributions annually on request from HMRC in April.

National Insurance was introduced by the National Insurance Act 1911, and was subsequently expanded by the Labour government in 1948. It has been subject to numerous amendments since.

You pay National Insurance if you are:

  • 16 or over
  • An employee earning a weekly wage above the minimum threshold
  • Self employed and making a yearly profit above the minimum threshold

Each tax year the minimum thresholds vary, and typically increase. In the tax year ending April 5th 2016, for example, the thresholds were:

  • Employees – £155 a week
  • Self employed – £5,965 a year

Expenses you can claim back as an employee

Mileage

If you drive on the road a lot for work then your employer can pay you a tax free mileage allowance.

The first 10,000 business miles in a tax year can be claimed at a rate of 45p per mile i.e. a total of £4,500 tax free.

If you exceed 10,000 miles then the rate drops to 25p per mile.

If your employer pays you a mileage rate that is less than HMRC’s allowance, then you can claim the difference on your Self Assessment tax return.

Working from home

If you work from home as part of your contract of employment or if you have in place a home working agreement then you can claim a home working allowance.

£4 per week can be claimed to cover the cost of household costs used for business purposes e.g. electricity, gas, energy, water and telephone bills.

 

Late self assessment fines and penalties

If you’ve missed the 31 January deadline for self assessment, at the very least, you are going to have a fine of £100.

The tax year ends on the 5th April and by the following 31 January you must:

  1. File your Self Assessment tax return
  2. Pay the tax owing on your Self Assessment tax return

Failure to do either of these can lead to fines and penalties. There are a series of penalties for not filing you return and a separate series of penalties for not paying the tax you owe. It all adds up quickly!

Fines & penalties for late return of Self Assessment

  • 1st Feb (return 1 day late) £100 fine from the 1st February.
  • 1st May (return 3 months late) £10 a day fine up to a maximum of £900 (90 days) for every day it is late
  • 1st Aug (return 6 months late) £300 fine or 5% of the tax owing, whichever is greater
  • 1st Feb (return 12 months late) £300 fine or 5% of the tax owing, whichever is greater

Fines & penalties for late payment of tax owing

  • 1st March (payment 30 days late) 5% charge on the tax owing on that day
  • 1st August (payment 6 months late) 5% charge on the tax owing on that day
  • 1st Feb (payment 12 months late) 5% charge on the tax owing on that day

Interest is charged on the tax owing including the amount levied in charges at a rate of 3%.

For more information HMRC provides a useful self assessment penalties  breakdown.