You can use the personal tax planner to better understand your personal finances and estimate the amount of income tax you may need to pay. If you’re aiming to avoid paying higher rate taxes by staying below the threshold, this is a great way to help see your position.
Company vs Personal taxes
It is important to appreciate that what you do in the online application day to day is about maintaining your company and its accounts. LiveCash is designed to give you a detailed insight into your company tax position.
The personal tax planner is independent of your company taxes as it is about you as an individual – personal taxes are subject to different rules, rates and thresholds.
Don’t forget that personal taxes are calculated based on the tax year, i.e. 6th Apr to 5th Apr.
How the calculator works
The information the online application has about your income is used by the calculator to help you see an estimate of your personal tax liability for the current tax year.
The calculator shows you how the income you have already received and expect to receive in the remainder of the tax year will be taxed.
It will display your income already ‘Earned in this employment’ and any ‘Additional salary to be paid’. To this you can enter your estimates of ‘Other income & benefits’, i.e. bank interest, benefits in kind, etc to improve the accuracy.
The calculator will also show any dividends ‘Issued so far this year’. You then have the option of entering a figure for ‘Additional dividends to be paid’ and if you pass the higher rate threshold you’ll see the estimated higher rate tax due.
If you rent out a property, you will need to declare the income you receive and expenses you incur on your Self Assessment Tax Return.
Any additional tax due on the profits you earn will be payable to HMRC as part of your Self Assessment tax liability.
Once you have entered your rental income and expenses, the calculator will add an estimate of your rental profits to your other income.