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What is the Self-Assessment tax estimate for self-employed sole traders?

Why is it useful?

Your Self-Assessment tax estimate provides an indication of what to set aside for the Taxman for both Income Tax and National Insurance.

Self-employed sole traders must submit a Self-Assessment tax return for the tax year ending 5 April by 31 January of the following year (e.g. the tax return for activities 6 April 2020 to 5 April 2021 must be submitted and the amount owed paid, by midnight 31 January 2022).

Your Self-Assessment tax return sets out the Income Tax and National Insurance you owe HMRC. You will need to set aside enough money to pay these taxes when they are due. 

Who does the estimate work for?

The estimate works for self-employed sole traders. We do not currently support estimates for CIS contractors, furnished holiday lettings or UK property businesses.

Where to find it in the app?

You can check your Tax estimate by following these steps:

1.  Open the Countingup app and tap the 'Accounting' tab at the bottom of the screen

accounting_tab_2x.png

2.  Tap 'Tax estimate'

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Tax estimate assumptions:

  • This tax estimate is based on your profit to date. It assumes you'll continue to earn at a consistent rate throughout the rest of the year.
  • This tax estimate only takes into account the business income and expenses captured by the app (from transactions through Countingup).
  • The calculation of your profit is based on traditional (“accruals”) accounting and not cash accounting (eg. based on the invoice or bill date rather than cash exchanged date).
  • You receive the standard Personal Allowance. It is the amount of income you do not have to pay tax on. Your Personal Allowance goes down by £1 for every £2 that your adjusted net income is above £100,000. Visit gov.uk to learn more.
  • You have no balancing payments.
  • You don't receive or pay back a student loan.
  • You have not carried forward losses from prior tax years (carried forward losses would typically reduce your tax bill).

The tax estimate is based on the data provided by the government to determine Income Tax rates and allowances and National Insurance rates. Visit gov.uk for more information about Income Tax rates and allowances or National Insurance rates for the current tax year.

 

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