When you turn on automatic tax transfers, the app automatically moves a set percentage of any transaction categorised as income straight into your tax pot. This feature is designed to help you prepare for future tax bills, but it does not calculate your exact tax due. You can easily turn this feature off, withdraw money transferred by mistake, or change transaction categories at any time to keep your records accurate. 🍯
Managing your automatic transfers
The automatic transfer feature helps you build your tax savings seamlessly in the background. However, it is important to know how to control it:
It is an estimate: The amount moved is a flat percentage chosen by you, not your final tax liability.
You can turn it off: If you want to stop these automatic movements, you can disable the feature at any time directly from your Tax pot screen. 📲
You can withdraw funds: If an amount is transferred to your tax pot in error, simply use the withdraw option on your screen to move it back to your main balance instantly.
Why was a personal deposit transferred to my tax pot?
By default, the app is set up to identify most new incoming payments as Sales income. If you transfer your own money into the account simply to fund it, the app might mistake this capital injection for a business sale and automatically trigger a tax pot transfer.
To prevent this from happening, follow these simple tips when adding funds to your account:
Use a clear payment reference: When transferring money from an external bank account, use a reference like "fund account". The app will recognise this phrase and automatically categorise the transaction as capital or a personal investment rather than business income.
Use the inbound transfer feature: If you use the secure transfer feature inside the app to pull money into your account, the correct reference is automatically applied for you so your tax pot is not triggered. 💸
Manually update the category: If you forgot to include a reference and the deposit was marked as a sale by default, don't worry. Simply tap the transaction in the app and manually change the category to ensure your records stay correct. 📈
Once you have updated the category of the deposit away from an income type, you can safely withdraw the automated savings from your tax pot back into your main account balance.