Tax returns through Self-Assessment are used by HM Revenue and Customs (HMRC) in their efforts to collect income tax from Britons. According to Office for National Statistics (ONS) figures, in the 2017/18 tax year, the government received a total of £183billion in income taxes through self-assessment and PAYE. The importance of Self-Assessment, therefore, cannot be denied – for Britons and the government alike.
A vital tax deadline is occurring within the coming weeks, which will require those who need to, fill out a return to act.
January 31, 2020 is the final deadline for an online tax return to be filled out.
This is alongside tax payments, including those payments on account that were deferred from July 31.
As such, Britons are being actively encouraged to start their self-assessment process as soon as possible.
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The government has established a calculator designed to help Britons estimate their income tax for the current tax year.
The calculator will tell people their take-home pay if they do not have any other deductions.
These deductions could include pension contributions or student loans.
However, it is worth noting there are certain people who are excluded from being able to receive an online estimate.
These are those who are not a PAYE taxpayer, people who only have income from self-employment or state benefits, and those who contribute to a pension scheme through their employer.
For those who are self-employed, however, there is an alternative option likely to provide assistance with budgeting for a tax bill.
The self-employed ready reckoner tool, also available on the government website, is designed to help people budget for their Self-Assessment tax bill for 2020/21.
Britons are required to enter their estimated weekly or monthly profit into the HMRC calculator.
Doing so, will provide them with an idea of how much Income Tax, Class Two and Class Four National Insurance they will have to pay.
This tool, however, assumes a person has no other taxable income and receives the standard Personal Allowance.
The government website states: “It does not include payments you must make for previous tax bills – known as payments on account.”
It is worth noting there are also a number of other calculators available online designed to help people with their tax bill and self-employed income.
These include offerings from Which?, GoSimpleTax, and debt charity StepChange.