How the figures are calculated

Every calculator on the site calls the same engine, a set of pure functions fed by one parameter file for the tax year 6 April 2026 to 5 April 2027. No figure is typed into a page: when a rate changes, it changes in one place and every page follows. The parameter file was last checked against its sources on 15 October 2026.

1. Profit

Profit is turnover minus allowable expenses (GOV.UK, Expenses if you're self-employed), or turnover minus the £1,000 trading allowance if you choose it (HMRC, Tax-free allowances on property and trading income); you cannot use both. We assume the cash basis, the default for sole traders (GOV.UK, Cash basis), and an accounting year that matches the tax year.

2. Income Tax

The Personal Allowance is £12,570, reduced by £1 for every £2 of adjusted net income over £100,000 (Income Tax Act 2007, section 35 (personal allowance reduction)). Wages from a job, then profit, use the allowance first; dividends sit on top. In England, Wales and Northern Ireland taxable income is charged at 20 % (basic rate to £37,700 of taxable income), 40 % (higher rate to £125,140 of taxable income), 45 % (additional rate above). In Scotland non-savings income is charged at 19 % to £3,967, 20 % to £16,956, 21 % to £31,092, 42 % to £62,430, 45 % to £125,140, 48 % above of taxable income (HMRC, Rates and thresholds for employers 2026 to 2027, GOV.UK, Income Tax in Scotland: 2026 to 2027 rates). Dividends use UK rates and bands wherever you live: £500 at nil, then 10.75 %, 35.75 % and 39.35 % (GOV.UK, Tax on dividends (rates from 6 April 2026)).

When you have a job as well, the Self Assessment bill is the Income Tax on all your income minus the Income Tax on the wages alone: that second figure stands for what PAYE took with a standard tax code. A K code, an underpayment collected through your code or a second job changes it.

Pension contributions to a relief-at-source scheme lower adjusted net income and earn extra relief through Self Assessment on the top slice of income, at the rate charged on it minus the 20 % added at source (GOV.UK, Tax on your private pension contributions: tax relief). We apply this to non-savings income; we do not check the annual allowance or the 100 % of earnings limit.

3. National Insurance

Class 4 is 6 % on profit between £12,570 and £50,270, and 2 % above (GOV.UK, Self-employed National Insurance rates (Class 2 and Class 4, 2026 to 2027), Social Security Contributions and Benefits Act 1992, section 15 (Class 4)). Class 2 is not charged: with profit of £7,105 or more the year is treated as paid, below it you may pay £3.65 a week voluntarily (HMRC, Rates and allowances: National Insurance contributions). Employee Class 1 on wages and a director's salary is 8 % between £12,570 and £50,270, 2 % above, on an annual basis; employer Class 1 is 15 % above £5,000. We do not apply the annual maximum that can limit Class 4 when you also pay Class 1 on a large salary.

4. Student and postgraduate loans

Through Self Assessment HMRC works out the repayment on your income for the whole year, profit plus wages: 9 % above £26,900 (Plan 1), £29,385 (Plan 2), £33,795 (Plan 4) or £25,000 (Plan 5), and 6 % above £21,000 for a Postgraduate Loan (GOV.UK, Repaying your student loan: how much you repay). What payroll already took on the wages is deducted. We do not add unearned income such as dividends, and we model one undergraduate plan at a time.

5. Payments on account

Each payment on account is half of last year's Income Tax and Class 4 paid through Self Assessment, loans and capital gains excluded, due on 31 January and 31 July. None is due when that amount is under £1,000 or when more than 80 % of your tax was taken at source (GOV.UK, Understand your Self Assessment bill: payments on account).

6. Limited company

The company pays Corporation Tax at 19 % on profits up to £50,000, 25 % from £250,000, and in between the main rate less marginal relief of 3/200 of the gap to the upper limit, the limits being divided by the number of associated companies plus one and cut for a short period (HMRC, Corporation Tax rates and allowances (financial year 2026), Corporation Tax Act 2010, section 18B (marginal relief)). We model one director who is the only employee, so the company cannot claim the Employment Allowance (GOV.UK, Employment Allowance: eligibility). The salary that leaves the director the most is searched on a £50 grid plus the thresholds, with everything left after Corporation Tax paid out as dividends. With the 2026/27 dividend rates, a company drawn in full leaves more cash than a sole trader in England, Wales and Northern Ireland only in a narrow band of profit from about £60,500; the comparison changes when profit is left in the company, and the chart shows both.

7. IR35 and umbrella companies

Inside IR35 the fee is treated as employment income: the fee-payer deducts Income Tax and employee National Insurance and pays employer National Insurance itself; student loans are repaid through Self Assessment (HMRC, Understanding off-payroll working (IR35)). Through an umbrella, the margin, employer National Insurance and, if passed on, the 0.5 % Apprenticeship Levy come out of the assignment rate before PAYE (GOV.UK, Working through an umbrella company). The size test that decides who assesses IR35 uses the Companies Act thresholds described in HMRC Employment Status Manual ESM10006A, size thresholds from 6 April 2025.

8. Making Tax Digital and deadlines

Qualifying income is self-employed turnover plus your share of gross property income, before expenses, year by year: over £50,000 in 2024/25 means MTD from 6 April 2026; £30,000 in 2025/26 means MTD from 6 April 2027; £20,000 in 2026/27 means MTD from 6 April 2028 (HMRC, Find out if and when you need to use Making Tax Digital for Income Tax (updated 26 March 2026), HMRC, Work out your qualifying income for Making Tax Digital for Income Tax). Quarterly deadlines and penalties are those of HMRC, Use Making Tax Digital for Income Tax: send quarterly updates and HMRC, Penalties for Making Tax Digital for Income Tax (updated 30 March 2026); Self Assessment deadlines and penalties outside MTD those of GOV.UK, Self Assessment tax returns: deadlines and GOV.UK, Self Assessment tax returns: penalties.

9. Tests

The engine is tested on every build. Among the cases: GOV.UK's dividend example (wages of £29,570 and dividends of £3,000 give £3,400 and £268.75), its self-employed student loan example (Plan 1 on £42,000 of combined income gives £1,359), HMRC's marginal relief limits for a company with three associated companies (£12,500 and £62,500), the simplified expenses mileage example (11,000 miles give £5,750), the Personal Allowance at £110,000 and £125,140, and the Scottish pension relief of 22 % on income taxed at 42 %. A failing test stops the site from being built.

10. What the calculators do not do

• savings interest, capital gains, the High Income Child Benefit Charge, Marriage Allowance and Gift Aid;
• losses carried forward, capital allowances on the traditional basis, partnerships and accounting years that do not end on 5 April;
• a tax code other than the standard one, and the National Insurance annual maximum;
• for companies: several directors or shareholders, employer pension contributions, the timing of dividends across tax years.

Method version: 2026-10-15. Questions or a figure that looks wrong: contact.