Complete tax planning tool with dividends, capital gains, allowances & reliefs
Calculate tax on dividend income with dividend allowance
Dividend Allowance 2025/26: £500 tax-free dividend income. Dividends within basic rate band taxed at 8.75%, higher rate 33.75%, additional rate 39.35%.
Calculate CGT on asset disposals with annual exemption
CGT Rates 2025/26: Annual exemption £6,000. Basic rate: 10% (shares), 18% (property). Higher rate: 20% (shares), 24% (property).
Maximize your tax-free allowances and available reliefs
Calculate tax on self-employment income with allowable expenses
Class 2 NI: £3.45/week if profits over £6,515. Class 4 NI: 9% on profits £12,570-£50,270, then 2%.
Calculate tax on rental income with allowable expenses
Mortgage Interest Relief: Basic rate tax relief (20%) given as tax reduction, not expense deduction. Higher rate taxpayers pay more tax on rental profits.
Calculate potential tax refunds from overpaid PAYE or changed circumstances
How to Claim: Use GOV.UK online services, phone HMRC, or complete relevant forms. Claims can be made up to 4 years after the end of the tax year.
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Understanding UK income tax is essential for managing your finances effectively. Our free income tax calculator uses the latest 2025/26 tax year rates to calculate exactly how much tax you'll pay on your earnings, whether you're employed, self-employed, or have multiple income streams. This comprehensive guide explains everything you need to know about UK income tax, from basic rates to advanced tax planning strategies.
| Band | Income Range | Rate |
|---|---|---|
| Personal Allowance | £0 - £12,570 | 0% |
| Basic Rate | £12,571 - £50,270 | 20% |
| Higher Rate | £50,271 - £125,140 | 40% |
| Additional Rate | Over £125,140 | 45% |
| Band | Income Range | Rate |
|---|---|---|
| Personal Allowance | £0 - £12,570 | 0% |
| Starter Rate | £12,571 - £14,876 | 19% |
| Basic Rate | £14,877 - £26,561 | 20% |
| Intermediate | £26,562 - £43,662 | 21% |
| Higher Rate | £43,663 - £125,140 | 42% |
| Top Rate | Over £125,140 | 47% |
⚠️ The £100,000 Trap: For every £2 you earn above £100,000, you lose £1 of your personal allowance. This creates an effective 60% tax rate on income between £100,000-£125,140! At £125,140, your personal allowance is completely eliminated.
Effective Tax Rate: 11.6% | Marginal Rate: 20% | Monthly Breakdown: £2,500 gross → £2,093 net
Effective Tax Rate: 19.1% | Marginal Rate: 40% | Note: Every extra £1 earned is taxed at 40% + 2% NI = 42p goes to tax!
⚠️ Marginal Rate in £100K-£125K: 60%! (40% tax + 20% from lost allowance). Tax Planning: Increase pension contribution by £10K to reduce adjusted income below £100K and reclaim full personal allowance - saves £2,000 in tax!
Your tax code appears on your payslip and tells your employer how much tax-free income you're entitled to. Here's how to decode it:
Multiply by 10 to get your tax-free allowance:
1257 × 10 = £12,570
This is your personal allowance for 2025/26
L means you're entitled to the standard personal allowance
This is the most common tax code for basic employment with no adjustments
Marriage Allowance Received - Your partner has transferred £1,260 of their allowance to you. Your allowance increases to £13,830.
Marriage Allowance Transferred - You've transferred £1,260 to your partner. Your allowance reduces to £11,310.
Other Calculations - HMRC needs to review your tax code. Common for multiple jobs or complex situations.
Basic Rate (20%) - All income taxed at 20%. Common for second jobs where your allowance is used elsewhere.
Higher Rate (40%) - All income taxed at 40%. For second jobs when main job uses all basic rate band.
Additional Rate (45%) - All income taxed at 45%. For very high earners with multiple income sources.
💡 Check Your Tax Code: Find it on your payslip, P60 (end of year), or HMRC personal tax account online. Wrong codes can mean overpaying or underpaying tax. If it looks wrong, contact HMRC immediately!
How it works: Pension contributions receive tax relief at your highest rate. For every £100 gross contribution, basic rate payers effectively pay £80, higher rate £60, additional rate £55. Annual allowance: £60,000 (can carry forward 3 years of unused allowance). Tax saving example: £10,000 contribution saves £2,000 (20%), £4,000 (40%), or £4,500 (45%) depending on your rate.
Eligibility: One partner earns under £12,570, the other is a basic rate taxpayer (£12,571-£50,270). Benefit: Transfer £1,260 of personal allowance = £252/year tax saving . How to claim: Apply via GOV.UK - can backdate 4 years for up to £1,242 refund. Restriction: Only for married couples/civil partners born after 5 April 1935.
What to sacrifice: Pension, cycle to work, electric car, childcare vouchers. Tax benefit: Reduce gross salary before tax/NI calculated. Example: £40K salary, sacrifice £3K for pension → taxed as if earning £37K, saving £1,260 (£600 income tax + £240 NI + £420 employer NI into pension). Bonus: Reduces adjusted net income (helpful for £100K trap or child benefit taper).
Basic benefit: Charity claims 25p for every £1 you give (20% basic rate relief automatic). Extra benefit for higher/additional rate: Claim extra 20%/25% via self-assessment. Bonus effect: Gift Aid extends your basic rate band, useful for avoiding higher rate or reducing adjusted income below £100K. Example: Donate £8,000 gross (costs you £6,400) → extends basic rate band by £8,000.
Personal Savings Allowance: £1,000 (basic rate) or £500 (higher rate) - earn interest tax-free. Dividend Allowance: £500 dividend income tax-free. Trading Allowance: £1,000 self-employment income tax-free. Property Allowance: £1,000 rental income tax-free. Capital Gains Allowance: £6,000 (2025/26). Strategy: Split investments between you and spouse to double allowances!
Tax year: 6 April - 5 April. Strategy: Defer bonus from March to April to spread over 2 tax years, potentially staying in lower band. Example: Earning £48K, expecting £5K bonus → defer to next year to avoid higher rate (saves £800). Self-employed: Time invoices and expenses around year-end. Investments: Realize capital gains in low-income years.
Allowed: Office costs, equipment, travel (not commuting), professional subscriptions, training, phone/internet (business %), accountancy fees. Home office: Simplified £6/week (£312/year) or actual costs with evidence. Vehicle: Mileage rate 45p/mile first 10,000 miles, then 25p/mile. Strategy: Keep detailed records, separate business/personal expenses, consider VAT flat rate scheme if applicable.
The mistake: HMRC estimates 6+ million UK taxpayers have wrong tax codes (1 in 8 workers!). Common causes: Employer doesn't update after job change, outdated emergency code (1257W, BR), wrong calculation after salary change, missing benefits/allowances. Wrong code = wrong tax deducted from every paycheck. Real UK example (2025/26): Sarah earns £35,000, should have 1257L code (£12,570 allowance), but employer still uses BR (Basic Rate 20% on all income, no allowance). Correct tax: (£35,000 - £12,570) × 20% = £4,486/year. Actual tax paid with BR code: £35,000 × 20% = £7,000/year. Annual overpayment: £7,000 - £4,486 = £2,514! Takes 6-12 months to reclaim via HMRC. Prevention: Check payslips monthly, verify tax code on P60 each April, use HMRC personal tax account online, call HMRC immediately if code looks wrong (0300 200 3300).
The mistake: Earning slightly over £100,000 without tax planning creates BRUTAL effective tax rate. Many earners accept £105K-£120K salaries without realizing marginal rate hits 60% (40% income tax + 20% from lost personal allowance + 2% NI). Personal allowance reduces £1 for every £2 earned over £100K, disappearing completely at £125,140. Real UK example (2025/26): Marketing director offered salary increase from £98,000 to £108,000 (£10K raise). Tax on £98K: £25,286 income tax + NI = £70,714 take-home. Tax on £108K: £33,286 income tax + NI = £72,714 take-home. Net benefit of £10K raise: Only £2,000 take-home! Effective rate on extra £10K = 80%! Better strategy: Negotiate £98K salary + £10K employer pension contribution. Result: Adjusted net income stays at £98K (keeps full personal allowance), £10K into pension (£12,500 gross with tax relief), save £6,000 in tax + build retirement fund. Annual savings: £6,000 tax + £12,500 pension value = £18,500 total benefit vs accepting cash raise!
The mistake: HMRC estimates 2.4 million eligible couples DON'T claim marriage allowance, losing £252/year each (total £600+ million unclaimed annually!). Eligibility: Married/civil partnership, one partner earns under £12,570 (unused personal allowance), other is basic rate taxpayer (£12,571-£50,270), both born after 5 April 1935. Transfer £1,260 of allowance = £252 tax saving (£1,260 × 20%). Real UK example (2025/26): Retired couple, husband has £8,000 state pension (£4,570 unused allowance), wife has £32,000 employment income (basic rate). They never claimed marriage allowance for 4 years. Lost savings: £252/year × 4 years = £1,008! Claiming process: Apply online at GOV.UK (5 minutes), automatic renewal each year, can backdate 4 tax years for lump sum refund. Their backdated claim: £252 × 4 = £1,008 refund + £252/year ongoing = £2,268 total over 5 years! Paid directly by HMRC within 5-8 weeks.
The mistake: Basic rate pension tax relief (20%) is automatic via "relief at source" - your pension provider claims it. BUT higher (40%) and additional (45%) rate taxpayers must claim extra 20%/25% relief via self-assessment - and HMRC estimates 40% of eligible people don't claim it! Real UK example (2025/26): IT consultant earns £75,000 (higher rate taxpayer), contributes £10,000 to personal pension via relief at source. Pension provider automatically claims 20% relief: She pays £8,000, government adds £2,000, total £10,000 in pension (correct so far). Extra relief due as higher rate taxpayer: 40% - 20% = 20% additional relief on £10,000 gross = £2,000 refund via self-assessment. She doesn't file self-assessment (thinks it's automatic), loses £2,000/year! Over 5 years: £2,000 × 5 = £10,000 lost! Claiming process: Register for self-assessment online, complete SA100 form (or use accountant), claim relief in "Pensions" section, receive refund or adjust tax code. Deadline: 31 January following tax year end.
The mistake: Employed workers can claim tax relief on "wholly, exclusively, necessarily" work expenses paid from own pocket (uniform washing, professional subscriptions, tools, work-from-home costs). Most employees don't know this exists or think it's "not worth the hassle" for small amounts - but claims accumulate significantly over time and can be backdated 4 years. Claimable expenses examples: Professional fees (£100-£400/year for industry bodies like GMC, RICS, BCS, CIPD), uniform washing/maintenance (£60/year automatic for nurses, chefs, mechanics - £125 if laundering at home), tools/equipment for work (construction workers, hairdressers), work-from-home costs (£6/week = £312/year flat rate, no evidence needed if employer doesn't reimburse). Real UK example (2025/26): NHS nurse, basic rate taxpayer, pays £120/year RCN membership + £60/year NMC registration + claims £125/year uniform washing. Total expenses: £305/year. Tax relief: £305 × 20% = £61/year refund. Never claimed for 4 years. Backdated claim: £61 × 4 = £244 lump sum + £61/year ongoing! Claiming: Use GOV.UK "Claim tax relief for your job expenses" online service (10 minutes), automatic renewal, HMRC adjusts tax code or sends refund.
The mistake: Starting new job without P45 from previous employer triggers emergency tax code (1257W or W1/M1 basis). Emergency codes tax you monthly with NO adjustment for tax already paid earlier in year = massive overpayment if you started mid-year. Many workers assume "HMRC will sort it automatically" - but refund takes 6-12 months via end-of-year reconciliation. Real UK example (2025/26): Teacher changes schools in January (month 10 of tax year). Previous school: £35,000 salary, paid April-December (9 months) = £26,250, tax paid £2,736. New school: £38,000 salary, starts January on emergency code 1257W M1 basis (month-1 basis = treats January as if it's the first month of tax year, gives full annual £12,570 allowance ÷ 12 = £1,047.50 monthly allowance). Correct monthly allowance in January: £12,570 annual ÷ 12 months × 10 months used = £10,475 total allowance already used, only £2,095 remaining for Jan-March. Actual monthly allowance with emergency code: £12,570 ÷ 12 = £1,047.50/month. Tax overpaid January-March: Approximately £1,400! Prevention: Give new employer your P45 immediately (shows tax paid to date), HMRC updates code within 2-4 weeks, or file early self-assessment to claim refund faster.
The mistake: Self-employed workers often under-claim expenses because they're unsure what's "allowed" or lack proper records. Common missed expenses: Home office costs (dedicated room % of rent/mortgage interest, utilities, council tax, internet), vehicle expenses (business mileage at 45p/mile first 10K, then 25p/mile - NOT commuting!), phone/broadband (business % only), professional development (courses, books, software, subscriptions), business insurance, accountancy fees, bank charges, marketing/advertising. Many sole traders use simplified £6/week (£312/year) home office allowance instead of claiming actual £2,000-£4,000 costs! Real UK example (2025/26): Freelance graphic designer, £55,000 revenue, claims only £8,000 expenses (laptops, software, marketing). Missed expenses: Home office (20% of £15,000 rent = £3,000), business mileage (2,500 miles × 45p = £1,125), phone (50% of £600 = £300), professional subscriptions (£400), accountant (£800). Total missed: £5,625! Tax on £47,000 profit: £10,826 income tax + £4,173 NI = £14,999. Tax on correct £41,375 profit (£55K - £13,625 total expenses): £8,551 income tax + £3,667 NI = £12,218. Annual overpayment by not claiming full expenses: £2,781! Over 5 years: £13,905 lost! Solution: Keep receipts, use accounting software (Xero, QuickBooks, FreeAgent), consult accountant annually (£500-£1,500 fee saves £2,000-£8,000 in tax!).
💡 Common Theme: Most income tax mistakes stem from not understanding the rules, assuming HMRC will "automatically fix it", or thinking small amounts "aren't worth claiming". In reality, small errors compound to £1,000s lost annually. Best practice: Review tax code quarterly, keep expense records year-round, file self-assessment even if not required (to claim refunds), use HMRC personal tax account online monthly, consider accountant if self-employed or high earner (£500-£1,500 fee typically saves £2,000-£10,000 in tax!).
Authoritative government sources for UK income tax rates, rules, and claims. Always verify tax information with official HMRC guidance.
Official UK income tax rates 2025/26 for England, Wales, Northern Ireland, Scotland. Personal allowance £12,570, basic rate 20% (£12,571-£50,270), higher rate 40% (£50,271-£125,140), additional rate 45% (over £125,140). Scotland has different bands. Includes £100K allowance taper rules (lose £1 per £2 earned over £100K). Updated annually each April by HMRC.
Secure online account to check tax code, update income, track tax refunds, view PAYE summary, claim marriage allowance, check National Insurance record, complete self-assessment. Login with Government Gateway ID. Essential for verifying tax calculations, updating employer/pension income, checking if owed refund. Real-time access to P60, P45, tax calculations. Free HMRC service available 24/7.
Phone: 0300 200 3300 (Mon-Fri 8am-6pm, closed weekends/bank holidays). For tax code queries, PAYE problems, marriage allowance claims, checking tax refunds, updating employment details. Textphone: 0300 200 3319 for hearing/speech difficulties. From outside UK: +44 135 535 9022. Have National Insurance number ready. Average wait: 10-20 minutes peak times. Free from UK landlines/mobiles. Welsh language service available.
Official process to claim overpaid PAYE income tax. Common reasons: Wrong tax code, changed jobs mid-year, emergency tax, work expenses, pension contributions, marriage allowance. Online claim via personal tax account (instant for simple cases). Forms: P87 (work expenses), P50 (stopped working), P53 (pension lump sum), P55 (redundancy). Can claim up to 4 tax years back. Typical refund: £500-£2,000. Processing: 5-8 weeks for postal, 2-4 weeks online. Refund paid by bank transfer or cheque.
Comprehensive PDF guide to all UK tax rates, allowances, reliefs for current & previous tax years. Includes: Income tax bands (England/Wales/NI + Scotland separate), personal allowance & taper, marriage allowance, blind person's allowance, dividend allowance, savings allowance, trading/property allowances, pension relief limits, Gift Aid rules. Published annually post-Spring Budget (March). Essential reference for accountants, tax advisors, payroll. Historical rates archive for prior years comparisons.
Scottish residents pay different income tax rates (Scotland has devolved tax powers since 2017). 2025/26 rates: Starter 19% (£12,571-£14,876), Basic 20% (£14,877-£26,561), Intermediate 21% (£26,562-£43,662), Higher 42% (£43,663-£125,140), Top 47% (over £125,140). Personal allowance same as rest of UK (£12,570). Generally higher tax for £28K+ earners vs England/Wales. Official Scottish Government policy documentation. Updated annually with Scottish Budget (December).
National Insurance (NI) is essentially a second income tax. Understanding it is crucial for calculating your true take-home pay.
| Income Band | Class 1 NI Rate | Annual NI (Examples) |
|---|---|---|
| £0 - £12,570 | 0% | No NI on first £12,570 |
| £12,571 - £50,270 | 8% | £30K salary = £1,394 NI, £60K = £3,016 + see below |
| Over £50,270 | 2% | £60K salary additional NI = £195 (on £9,730 over threshold) |
28%
£12,571-£50,270
20% tax + 8% NI
42%
£50,271-£100,000
40% tax + 2% NI
60%
£100,001-£125,140
40% tax + 2% NI + 20% lost allowance
Proven UK income tax reduction tactics used by accountants and tax advisers. Every strategy includes real UK 2025/26 examples with exact £ calculations showing how workers and self-employed save £500-£20,000+ annually by using allowances, reliefs, and salary sacrifice properly. Updated January 2025 with Finance Act 2024 rates.
How it works: Salary sacrifice = reduce gross salary BEFORE tax calculated, employer pays "saved" amount into pension. Avoid 40-45% income tax + 2% higher NI. Higher rate taxpayers save most. Critical: If earning £50,270-£60,000, salary sacrifice brings you below £50,270 higher rate threshold = drop from 40% to 20% on sacrificed amount = 20% saving! Real UK example (2025/26): David earns £60,000, wants £8,000 pension contribution (bring income below £50,270 higher rate threshold). Normal method (net pay after tax): Salary: £60,000. Tax: £9,486 (£7,540 basic + £3,946 higher rate on £60,000-£50,270 = £9,730 at 40%). NI: £5,124. Take-home: £45,390. David contributes £8,000 from take-home to pension. HMRC adds 20% relief = £10,000 total in pension. David claims 20% higher rate relief via Self Assessment = £1,600 refund. Cost to David: £8,000 - £1,600 refund = £6,400 net. Salary sacrifice method: David sacrifices £8,000 (salary becomes £52,000). Tax: £7,886 (all at 20% basic rate, no higher rate!). NI: £4,164 (£960 less NI). Take-home: £39,950. But £8,000 goes straight to pension! David's total: £39,950 + £8,000 pension = £47,950. Vs normal: £45,390 take-home (after £8,000 contribution & £1,600 refund) = £46,990. David gains: £47,950 - £46,990 = £960/year! Plus employer saves NI: £8,000 × 13.8% = £1,104. Many employers add 50% to pension = £552 extra. Total benefit: £960 + £552 = £1,512/year!
How it works: Personal allowance £12,570 tapers when income exceeds £100,000. Lose £1 allowance for every £2 earned above £100K. Fully withdrawn at £125,140. Result: 60% marginal tax rate £100,000-£125,140! (40% income tax + 20% on lost allowance). Plus 2% NI = 62% effective rate! Strategy: If earning £100,000-£125,140, reduce "adjusted net income" below £100K via pension contributions or Gift Aid donations. This RESTORES full personal allowance (saves £5,028 tax on £12,570 at 40%). Real UK example (2025/26): Sarah earns £110,000 (£10,000 over threshold). Personal allowance lost: £10,000 ÷ 2 = £5,000. Remaining allowance: £12,570 - £5,000 = £7,570. Tax calculation: Income: £110,000. Allowance: £7,570. Taxable: £102,430. Basic rate (£7,570-£50,270): £42,700 × 20% = £8,540. Higher rate (£50,270-£110,000): £59,730 × 40% = £23,892. Total tax: £32,432. NI: 12% on £37,700 + 2% on £59,730 = £4,524 + £1,195 = £5,719. Total tax + NI: £38,151. Take-home: £110,000 - £38,151 = £71,849. If Sarah salary sacrifices £10,000 pension: Adjusted income: £100,000 (exactly at threshold!). Full personal allowance: £12,570. Taxable: £100,000 - £12,570 = £87,430. Basic rate: £37,700 × 20% = £7,540. Higher rate: £49,730 × 40% = £19,892. Total tax: £27,432. NI on £100,000: £4,524 + £995 = £5,519. Total tax + NI: £32,951. Take-home: £100,000 - £32,951 = £67,049. But £10,000 in pension! Sarah's total: £67,049 + £10,000 pension = £77,049. Saved: £77,049 - £71,849 = £5,200! £10,000 pension contribution only "cost" £4,800 (£71,849 - £67,049). Effective tax relief: 52%! (£5,200 ÷ £10,000 = 52% of contribution returned via tax savings).
How it works: If married/civil partnership, one partner earns under £12,570 (not using full personal allowance), can transfer £1,260 to spouse earning £12,571-£50,270 (basic rate taxpayer). Transferring partner reduces allowance to £11,310. Receiving partner gets £1,260 extra allowance = saves £252 tax (£1,260 × 20%). Critical: Both must be born after 6 April 1935. Receiving partner must be basic rate (NOT higher rate £50,270+). Can backdate 4 tax years (2020/21-2023/24) for £1,008 lump sum (£252 × 4). Real UK example (2025/26): Mike earns £55,000 (higher rate). Lisa earns £8,000 (under allowance). Without Marriage Allowance: Mike: Salary £55,000. Tax: £7,540 + £1,892 (£4,730 at 40%) = £9,432. Lisa: Salary £8,000. Tax: £0 (under £12,570 allowance). Total household tax: £9,432. With Marriage Allowance: Lisa transfers £1,260 to Mike. BUT WAIT! Mike earns over £50,270 (higher rate). Marriage Allowance doesn't work for higher rate taxpayers! This is a common mistake. Correct example: Tom earns £35,000 (basic rate). Rachel earns £6,000 (under allowance). Without Marriage Allowance: Tom: Salary £35,000. Allowance £12,570. Taxable: £22,430. Tax: £22,430 × 20% = £4,486. Rachel: £0 tax. Total: £4,486. With Marriage Allowance: Rachel transfers £1,260 to Tom (Rachel's allowance becomes £11,310, Tom's becomes £13,830). Tom: Allowance £13,830. Taxable: £35,000 - £13,830 = £21,170. Tax: £21,170 × 20% = £4,234. Rachel: Still £0 tax (income £6,000 under £11,310). Total: £4,234. Saved: £4,486 - £4,234 = £252/year! Backdate 4 years: Apply via GOV.UK (takes 10 minutes). Claim 2020/21, 2021/22, 2022/23, 2023/24 = £252 × 4 = £1,008 lump sum! Then £252/year ongoing. Lifetime value (30 years marriage): £252 × 30 = £7,560!
How it works: Personal Savings Allowance (PSA) = tax-free interest on savings accounts, bonds, peer-to-peer lending. Basic rate taxpayers: £1,000 PSA (£1,000 × 20% = save £200 tax). Higher rate taxpayers: £500 PSA (£500 × 40% = save £200 tax). Additional rate taxpayers (£125,140+): £0 PSA (all interest taxed 45%). Critical: PSA doesn't apply to ISA interest (already tax-free) or dividends (separate £500 dividend allowance). Real UK example (2025/26): Emma, basic rate taxpayer (£40,000 salary). Savings: £20,000 in 5% savings account. Interest earned: £20,000 × 5% = £1,000/year. PSA: £1,000 (basic rate). Interest covered by PSA: £1,000 (all of it!). Tax on interest: £0! If Emma was higher rate (£60,000 salary): PSA: £500 only (higher rate). Interest: £1,000. Covered: £500. Taxable: £1,000 - £500 = £500. Tax: £500 × 40% = £200. Strategy to avoid tax: Move £10,000 into ISA (interest tax-free, doesn't use PSA). Keep £10,000 in savings account (interest £500, within £500 PSA). Tax: £0! Larger example - high earner: James, additional rate taxpayer (£150,000 salary). Savings: £100,000 in 5% account. Interest: £5,000/year. PSA: £0 (additional rate = no PSA). Tax: £5,000 × 45% = £2,250 tax on interest! Strategy: Move all £100,000 into Cash ISA (5% interest). Interest: £5,000/year. Tax: £0 (ISAs exempt)! Saved: £2,250/year! ISA allowance £20,000/year, so James needs to gradually move £20,000/year over 5 years. Meanwhile, prioritize highest interest accounts for ISA (5% ISA vs 4% taxable = effective 7.3% after 45% tax!).
How it works: Gift Aid = when you donate to charity, charity claims 25% on top from HMRC (you donate £80, charity gets £100). If higher/additional rate taxpayer, YOU claim extra 20-25% relief via Self Assessment (total relief 40-45%). Plus: Gift Aid "extends" basic rate band by donation amount. Useful if income just over £50,270 higher rate threshold - donations can bring you back into basic rate! Real UK example (2025/26): Sophie earns £55,000, donates £4,000 to charity (Gift Aid). Without Gift Aid tax relief: Salary: £55,000. Basic rate band: £12,570-£50,270. Higher rate: £50,270-£55,000 = £4,730. Tax: £7,540 basic + £1,892 higher (£4,730 × 40%) = £9,432. Sophie donates £4,000 (after tax). Net cost: £4,000. With Gift Aid: Sophie donates £4,000. Charity claims Gift Aid: £4,000 ÷ 0.8 = £5,000 total (charity gets £5,000). Sophie's basic rate band EXTENDED by £5,000: New band limit: £50,270 + £5,000 = £55,270. All of Sophie's £55,000 income now in basic rate! Tax: £55,000 - £12,570 = £42,430 taxable × 20% = £8,486. Vs without Gift Aid: £9,432. Tax saved: £9,432 - £8,486 = £946! Sophie donated £4,000, got £946 tax relief. Net cost: £4,000 - £946 = £3,054. Charity received £5,000. Sophie paid £3,054 to give charity £5,000 = 61% cost! (Government subsidized £1,946 of the £5,000 donation!). Higher rate example: Mark earns £80,000, donates £8,000. Basic rate band extended: £50,270 + £10,000 (£8,000 donation grossed up) = £60,270. Income in higher rate: £80,000 - £60,270 = £19,730 (vs £29,730 without donation). Tax saved: £10,000 × 40% = £4,000! Net cost: £8,000 - £4,000 = £4,000 to give charity £10,000 (50% cost!).
How it works: Tax year runs 6 April - 5 April (NOT calendar year!). Each tax year gets new personal allowance (£12,570), basic rate band (£37,700), dividend allowance (£500), etc. Strategy: If self-employed or company director (control income timing), spread large income across 2 tax years instead of taking all in one year. Use two allowances/basic rate bands = lower marginal rate. Real UK example (2025/26 & 2025/26): Claire, self-employed consultant, expects £90,000 profit for year. Can choose when to invoice/receive payments. Option A: Take £90,000 in one tax year (2025/26): Income: £90,000. Allowance: £12,570. Taxable: £77,430. Basic rate: £37,700 × 20% = £7,540. Higher rate: £39,730 × 40% = £15,892. Income tax: £23,432. NI: Class 4 = 9% on £37,700 + 2% on £39,730 = £3,393 + £795 = £4,188. Class 2: £3.45/week × 52 = £179. Total tax + NI: £23,432 + £4,188 + £179 = £27,799. Take-home: £90,000 - £27,799 = £62,201. Option B: Spread £45,000 over 2 tax years: 2025/26: £45,000. 2025/26: £45,000. Each year: Allowance: £12,570. Taxable: £32,430. All at basic rate 20%: £32,430 × 20% = £6,486 tax. NI Class 4: 9% on £32,430 = £2,919. Class 2: £179. Total per year: £6,486 + £2,919 + £179 = £9,584. Over 2 years: £9,584 × 2 = £19,168. Vs Option A: £27,799. Saved: £27,799 - £19,168 = £8,631! Claire defers invoicing £45,000 work from March 2025 to April 2025 (crosses tax year), saves £8,631! Company director example: Dividends timing. Instead of £50,000 dividend in one year (£500 allowance, £49,500 taxable at 8.75-33.75% depending on rate = £4,331-£16,706 tax), take £25,000 in 2025/26 + £25,000 in 2025/26 = use two £500 allowances, potentially stay in lower dividend tax band. Save £2,000-£8,000!
How it works: Trading allowance = £1,000/year tax-free income from self-employment, freelancing, casual trading (eBay, Etsy, Airbnb, tutoring, consultancy). If gross income under £1,000, don't even need to register for Self Assessment! If over £1,000, choose: (1) Deduct £1,000 allowance instead of actual expenses (simpler), OR (2) Claim actual expenses (better if expenses over £1,000). Can't claim both! Real UK example (2025/26): Ahmed, employed full-time £45,000, also does freelance graphic design. Freelance income: £3,500. Expenses: £400 (software, laptop depreciation, home office). Option 1: Use trading allowance (£1,000): Gross income: £3,500. Trading allowance: £1,000. Taxable profit: £3,500 - £1,000 = £2,500. Tax (Ahmed is 20% basic rate on employment income): £2,500 × 20% = £500. NI Class 4: £2,500 × 9% = £225. Total tax + NI: £725. Option 2: Claim actual expenses (£400): Gross income: £3,500. Expenses: £400. Taxable profit: £3,500 - £400 = £3,100. Tax: £3,100 × 20% = £620. NI Class 4: £3,100 × 9% = £279. Total tax + NI: £899. Option 1 better: Saves £899 - £725 = £174! Trading allowance worth more than actual expenses (£1,000 vs £400). Small income example: Lisa sells handmade crafts on Etsy. Income: £800/year. Expenses: £200. Use trading allowance: Income £800 fully covered by £1,000 allowance. Tax: £0. No Self Assessment needed! vs claiming expenses: Profit £600, tax £120, PLUS must register for Self Assessment (hassle!). Trading allowance = simpler! Property allowance: Separate £1,000 allowance for property income (Airbnb spare room, renting driveway). Can use BOTH trading + property allowances = £2,000 total tax-free side income!
Expensive UK income tax mistakes costing workers and self-employed £300-£15,000+ every year. These errors are completely preventable with proper understanding of tax rules and HMRC deadlines. Learn what NOT to do with real UK 2025/26 examples showing exact financial consequences and penalties.
The mistake: Not checking monthly payslip tax code. Emergency codes (1257L W1, 1257L M1, BR, 0T) or wrong cumulative codes cause massive overpayment. HMRC stopped sending paper tax code notifications - must check Personal Tax Account online or payslip! Real UK example (2025/26): Lisa changes jobs mid-year (started new job July 2024). New employer doesn't have P45, uses emergency code 1257L M1 (Month 1 basis). Lisa earns £3,500/month (£42,000/year). Correct code should be 1257L (cumulative): Annual allowance £12,570 spread over 12 months. Month 1: Allowance £1,047.50, taxable £2,452.50, tax £490.50. Month 2: Cumulative allowance £2,095, cumulative pay £7,000, cumulative taxable £4,905, cumulative tax £981. Etc. Emergency code 1257L M1 (what Lisa's employer uses): Only uses CURRENT MONTH allowance (£1,047.50), doesn't carry forward unused. Month 1 (July): Pay £3,500, allowance £1,047.50, taxable £2,452.50, tax £490.50. Month 2 (August): Pay £3,500, allowance £1,047.50 (same!), taxable £2,452.50, tax £490.50. Every month: £490.50 tax. vs correct cumulative: Month 1: £490.50 (same). Month 2: £981 cumulative - £490.50 already paid = £490.50 (same). But later months differ! Month 6 (December): Emergency M1: £490.50 (total so far £2,943). Cumulative correct: Should be £2,943 total (same by coincidence at this salary!). BUT Lisa started mid-year! She only worked 6 months (July-December). Emergency code problem: Used £1,047.50 allowance × 6 months = £6,285 of her £12,570 annual allowance. WASTED £6,285 allowance! Correct (if code updated to cumulative in July): Annual allowance £12,570 available. Worked 6 months, used £12,570 for full year pro-rated = £6,285. But with cumulative code from month 1, can use FULL £12,570 over 6 months! £12,570 ÷ 6 = £2,095/month allowance. Tax: (£3,500 - £2,095) × 20% = £281/month. Total 6 months: £1,686. vs emergency M1: £490.50 × 6 = £2,943. Overpaid: £2,943 - £1,686 = £1,257! Lisa won't know until P800 arrives August next year (18 months after overpayment started). Refund arrives October = 2 years locked!
The mistake: Earning £100,000-£125,140 without realizing you're paying 60% marginal tax rate (40% income tax + 20% from lost personal allowance taper). Every £1 earned £100K-£125K, you lose 50p allowance (costs 20p extra tax) + pay 40p tax = 60p tax! Plus 2% NI = 62% total! Real UK example (2025/26): Tom gets £10,000 bonus, taking salary from £100,000 to £110,000. Tom thinks: "£10,000 bonus, higher rate 40% tax, will get £6,000 after tax." Reality: At £100,000: Personal allowance £12,570 (full). Tax: (£100,000 - £12,570) × rates = £27,432. At £110,000: Personal allowance lost: £10,000 ÷ 2 = £5,000 lost. Remaining: £12,570 - £5,000 = £7,570. Tax: (£110,000 - £7,570) × rates = £32,432. Extra tax on £10,000 bonus: £32,432 - £27,432 = £5,000! vs Tom expected: £10,000 × 40% = £4,000 tax. Tom pays £1,000 MORE than expected (extra 10% due to lost allowance!). Plus NI: £10,000 × 2% = £200. Total deductions: £5,000 + £200 = £5,200. Tom's £10,000 bonus becomes £4,800 take-home (52% deduction!). Worse - marginal rate demonstration: Alex earns exactly £100,000. Gets £1,000 pay rise. Tax on £1,000: Loses £500 allowance (£1,000 ÷ 2 taper). £500 allowance lost costs: £500 × 40% = £200 extra tax. Plus tax on £1,000 income: £1,000 × 40% = £400. Total tax: £200 + £400 = £600. Plus NI: £1,000 × 2% = £20. Take-home from £1,000 raise: £1,000 - £600 - £20 = £380. Effective rate: 62%! How to avoid: If salary £110,000, pension sacrifice £10,000. Adjusted income: £100,000 (just under threshold). Restores full £12,570 allowance! Saves £5,000 tax + £200 NI = £5,200. £10,000 pension only "cost" £4,800 net. Vs taking salary: Get £4,800 cash anyway. Pension sacrifice = same take-home BUT £10,000 in pension instead of HMRC!
The mistake: Being eligible for Marriage Allowance but not claiming. 2.4 million UK couples eligible but haven't claimed (HMRC data). Criteria: Married/civil partnership, one earns under £12,570, other earns £12,571-£50,270 (basic rate only). Many don't know it exists! Real UK example (2025/26): David & Emma married 10 years. David earns £38,000 (basic rate). Emma earns £9,000 (part-time, under allowance). Neither claimed Marriage Allowance ever! Emma's unused allowance: £12,570 - £9,000 = £3,570 unused every year. Can transfer £1,260 to David. 10 years wasted: Could have saved £252/year × 10 years = £2,520 total lost! BUT can backdate 4 years: 2020/21, 2021/22, 2022/23, 2023/24 = £252 × 4 = £1,008 lump sum. Years 2014/15-2019/20: LOST forever (can only backdate 4 years). Lost: £252 × 6 = £1,512 permanently gone. If David & Emma claim now: Apply online GOV.UK (10 minutes). Get £1,008 backdated refund (2-3 months). Plus £252/year ongoing for life. 20 more years married: £252 × 20 = £5,040 future savings. Total recovered: £1,008 + £5,040 = £6,048. Common mistake - higher rate: John earns £65,000 (higher rate). Wife Sarah earns £8,000. John thinks "we qualify!" WRONG! Marriage Allowance only for basic rate receiver (£12,571-£50,270). John earns £65,000 = higher rate (over £50,270). NOT ELIGIBLE. They lose £252/year permanently (no way to fix this!).
The mistake: Missing 31 January Self Assessment deadline (paper deadline 31 October, online 31 January). Automatic £100 fine day 1 late, then escalating penalties + interest on unpaid tax. Critical: If you need to file Self Assessment (self-employed income over £1,000, untaxed income over £2,500, capital gains over annual exemption, Child Benefit High Income Charge, etc.) and miss deadline, penalties are AUTOMATIC - no excuses accepted! Real UK example (2025/26 tax year, deadline 31 January 2026): Sophie, self-employed, owes £8,000 tax for 2025/26. Deadline: 31 January 2026 (file return + pay tax). Sophie busy, forgets, files 15 March 2026 (6 weeks late). Penalties: Day 1 late (1 Feb): £100 automatic. 3 months late (1 May): £10/day for 90 days = £900 (IF still not filed by then, but Sophie filed 15 March so avoids this). Sophie's penalty: £100 only (filed within 3 months). Plus interest on unpaid tax: £8,000 owed from 31 Jan 2026. Sophie pays 15 March (6 weeks late). Interest at 7.75%: £8,000 × 7.75% × (6 weeks ÷ 52) = £72 interest. Total cost: £100 penalty + £72 interest = £172 for being 6 weeks late! Worse scenario - 6+ months late: Mark owes £12,000 tax. Deadline 31 January 2026. Files 10 August 2026 (6 months late). Penalties: Day 1: £100. 3 months (1 May): £10/day × 90 days = £900 OR 5% of tax owed (whichever higher). 5% of £12,000 = £600. 3-month penalty: £900. 6 months (1 Aug): £300 OR 5% of tax (whichever higher). 5% = £600. 6-month penalty: £600. Total penalties: £100 + £900 + £600 = £1,600! Plus interest: £12,000 × 7.75% × 6 months = £465. Total cost: £1,600 + £465 = £2,065 extra! Mark's £12,000 tax bill becomes £14,065 for filing 6 months late!
The mistake: Higher/additional rate taxpayers making pension contributions via "relief at source" (personal pensions, not workplace salary sacrifice) must CLAIM extra 20-25% relief via Self Assessment. Pension provider only claims 20% basic relief automatically. Many higher rate taxpayers don't file Self Assessment because they think "I'm PAYE, don't need to" = lose thousands! Real UK example (2025/26): Rachel earns £70,000 (higher rate). Has personal pension (SIPP). Contributes £10,000/year (from net income after tax). What happens automatically: Rachel pays £10,000 to pension. Pension provider claims 20% basic rate relief: £10,000 ÷ 0.8 = £12,500 goes into pension (£10,000 from Rachel + £2,500 from HMRC basic relief). Total in pension: £12,500. What Rachel SHOULD do (claim extra higher rate relief): File Self Assessment showing £12,500 pension contribution (gross amount). HMRC calculates: Rachel's higher rate income: £70,000 - £50,270 = £19,730 at 40%. Pension relief due: £12,500 × 40% = £5,000 total relief. Already received: £2,500 (basic rate claimed by pension provider). Extra relief owed: £5,000 - £2,500 = £2,500! HMRC refunds Rachel £2,500 OR adjusts tax code to give £2,500 less tax next year. Rachel's TRUE cost: Paid £10,000, got £2,500 refund = net £7,500 to put £12,500 in pension. If Rachel doesn't claim (common mistake!): Paid £10,000, no refund. Lost: £2,500/year! Over 10 years: £25,000 lost! Additional rate example (45%): James earns £200,000, contributes £40,000. Basic relief: £10,000 (provider claims). Total due 45%: £18,000. Extra: £18,000 - £10,000 = £8,000/year! If doesn't claim: Loses £8,000/year = £80,000 over 10 years!
The mistake: Some banks incorrectly deduct 20% tax on savings interest even if you're entitled to Personal Savings Allowance (PSA). Or HMRC sends tax bill for interest under PSA threshold. Critical: PSA means most people pay £0 tax on savings interest (basic rate £1,000, higher £500 PSA). But if bank deducts tax OR HMRC bills you, must claim refund (doesn't happen automatically!). Real UK example (2025/26): Tom, basic rate taxpayer (£30,000 salary). Savings: £15,000 in fixed-rate bond (6% interest). Interest: £15,000 × 6% = £900/year. Tom's PSA: £1,000 (basic rate). Interest £900 fully covered by PSA. Tax owed: £0. BUT: Tom's bank (old offshore account moved to UK) deducts 20% tax at source. Tax deducted: £900 × 20% = £180. Tom receives: £900 - £180 = £720. Tom overpaid £180! How to claim refund: Complete form R40 (claim for repayment of tax) OR contact HMRC helpline 0300 200 3300. Provide: Bank interest statement showing tax deducted, proof of income (P60/payslips showing basic rate taxpayer), PSA entitlement. HMRC refunds £180 by cheque (6-8 weeks). If Tom doesn't claim: Loses £180/year. Over 5 years with same account: £900 lost! HMRC tax bill mistake: Sarah has £20,000 savings, interest £1,000 (exactly at PSA limit). Sarah is basic rate. HMRC sends "Simple Assessment" tax bill: "You owe £200 tax on savings interest". Sarah panics, pays £200. WRONG! Sarah's interest £1,000 = within £1,000 PSA. Tax owed: £0. HMRC made error (didn't apply PSA correctly). Sarah should have: Called HMRC, explained PSA, got bill cancelled. If paid already: Claim refund form R40. Sarah lost £200 + time/stress chasing refund!
The mistake: Having income that requires Self Assessment (self-employment £1,000+, rental income £2,500+, capital gains over £3,000 annual exemption, Child Benefit High Income Charge if earn £60,000+, etc.) but not registering by 5 October deadline. Penalties start BEFORE you even file! Real UK example (2025/26 tax year): Laura starts freelancing April 2024 (side income alongside £45,000 employment). Freelance income 2025/26: £8,000. Must register for Self Assessment by 5 October 2025 (within 6 months of becoming self-employed). Laura doesn't know deadline, registers 15 December 2025 (2 months late). Penalty for late registration: HMRC can charge up to £100 for registering after 5 October (discretionary). Laura gets £100 penalty letter January 2026. Then must file by 31 January 2026: If Laura files late (because she only just registered December!), gets another £100 penalty + £10/day after 3 months. Total penalties: £100 registration + £100 filing = £200 minimum. Plus rush to file in 6 weeks = makes mistakes, misses tax planning opportunities (forgot to claim expenses, didn't optimize pension contributions, etc.). Lost planning opportunity: Laura's freelance profit £8,000. If she'd known earlier (registered on time), could have: Made £8,000 pension contribution (bring adjusted income to £45,000, avoid higher rate on freelance). Tax saved: £8,000 × 20% = £1,600. Because Laura didn't know until December, too late to make 2025/26 pension contribution. Lost: £1,600 tax saving! Child Benefit High Income Charge example: Mark earns £65,000, partner claims Child Benefit £2,212/year (2 children). Mark must register for Self Assessment by 5 October AND pay High Income Charge (claws back Child Benefit if earn £60,000+). Mark doesn't register. HMRC discovers via Child Benefit data matching. Sends penalty: £100 late registration + tax owed £2,212 + interest £172 + £100 late filing. Total: £2,584! vs if registered on time: £2,212 charge only (could decide to stop claiming Child Benefit to avoid charge + Self Assessment hassle).
Essential UK government resources for income tax, Self Assessment, tax codes, and HMRC services. All links verified January 2025 and lead directly to official GOV.UK and HMRC sources.
Essential HMRC online portal to manage all income tax affairs. Check tax code (instantly see if wrong code applied, 6 million UK workers overpay due to incorrect codes!), view PAYE tax paid this year (see exactly how much deducted each month), track Self Assessment deadlines and payments, claim Marriage Allowance (transfer 10% personal allowance to spouse, save £252/year, backdate 4 years = £1,008 lump sum), check State Pension forecast, update employment details (new job, change of hours, second income, benefits), claim tax refunds (P800 overpayments shown here, click to claim - 4.5 million taxpayers owed refunds!), view tax credits and Child Benefit. Sign up: Need Government Gateway ID (create if don't have, takes 10 minutes, verify identity via payslip/P60/passport). Benefits: 24/7 access, instant updates when tax code changes, email/text alerts for important dates (31 Jan Self Assessment deadline), see real-time PAYE tax vs estimate (catch overpayments early!). Common uses: Check if emergency tax code applied (1257L W1/M1), track £100K-£125K personal allowance taper (see adjusted net income), view pending P800 refund status, apply for Marriage Allowance online (approved within 2 months).
Official HMRC comprehensive guide to UK income tax rates, bands, and allowances for current and previous years. 2025/26 rates: Personal Allowance £12,570 (tapers if income over £100,000, fully withdrawn at £125,140 - creates 60% marginal rate trap!), Basic rate 20% on £12,571-£50,270 (£37,700 band), Higher rate 40% on £50,271-£125,140, Additional rate 45% on £125,141+. Scotland: Different rates (19-48%, progressive bands). Wales: Same as England. Dividend tax: 8.75% basic, 33.75% higher, 39.35% additional (dividend allowance £500/year). Savings: Personal Savings Allowance £1,000 basic rate, £500 higher rate, £0 additional rate (interest tax-free within allowance). Marriage Allowance: Transfer £1,260 to spouse (born after 6 April 1935), save £252/year if spouse basic rate taxpayer. Trading/Property allowances: £1,000 each, tax-free income from self-employment or rental. Blind Person's Allowance: £3,070 (2025/26). Historical rates: Links to previous tax years (useful for checking old tax codes, backdated claims, pension planning). Changes announced: Budget updates, rate freezes (personal allowance frozen £12,570 until April 2028), threshold changes. Calculator links: Estimate tax bill, check if need Self Assessment, Marriage Allowance calculator.
Official HMRC guidance on Self Assessment tax returns for self-employed, landlords, and high earners. Who must file: Self-employment income over £1,000, untaxed income over £2,500 (rental, savings interest over PSA, foreign income), capital gains over £3,000 annual exemption (even if no tax owed!), income over £100,000 (even if PAYE), Child Benefit High Income Charge if you/partner earn £60,000+, company directors, trustees. Key deadlines: Register by 5 October after tax year ends (or within 3 months of self-employment start), paper deadline 31 October (midnight), online deadline 31 January (midnight), payment deadline 31 January (tax owed for previous year PLUS first payment on account for current year). Penalties: £100 automatic day 1 late, then £10/day after 3 months (max £900), then 5% of tax at 6 months and 12 months. Interest: 7.75% on unpaid tax from due date. How to file: Online via GOV.UK (need Government Gateway, UTR number from HMRC), commercial software (£0-£150/year, easier for complex returns, auto-calculates), paper SA100 form (must request, only if exemption applies). What to report: All income sources (employment, self-employment, property, dividends, interest, foreign), expenses (allowable business costs, property expenses, pension contributions, Gift Aid), capital gains (shares sold, second properties), claims (Marriage Allowance, tax reliefs). Payment on account: Two advance payments (31 Jan & 31 Jul) for next year's tax if owe over £1,000, based on previous year liability. Balancing payment: Top-up on 31 Jan if actual tax higher than payments on account.
Official HMRC guide to understanding and checking UK tax codes. Common codes 2025/26: 1257L (standard code, personal allowance £12,570), 1257L W1/M1 (emergency non-cumulative, Month 1 basis - WRONG! causes overpayment), BR (Basic Rate, all income taxed 20%, no allowance - usually second job), 0T (no allowance, tax everything - emergency/complex situations), K code (negative allowance, owe tax from previous year/benefits/pension). What codes mean: Number = personal allowance ÷ 10 (1257 = £12,570 allowance), Letter = tax treatment (L standard, M Marriage Allowance receiver, N Marriage Allowance giver, T complex/personalized, K negative). Suffix W1/M1/X: Emergency non-cumulative (only uses current week/month allowance, doesn't carry forward unused - causes massive overpayment if used all year!). How to check: Look at payslip (top right usually), check Personal Tax Account online (updated real-time when HMRC changes), P45 when leave job, P60 end of tax year. When code is wrong: Common causes (changed jobs, emergency code applied, declared extra income on Self Assessment, student loan repayment added, company benefits reported late, underpaid tax previous year). How to fix: Update Personal Tax Account online (tell HMRC about job change, income change, benefits), call HMRC Income Tax helpline 0300 200 3300 (Monday-Friday 8am-6pm), employer can't change code (only HMRC). Refunds: If overpaid due to wrong code, HMRC sends P800 following August (refund by bank transfer or cheque, takes 2 months). Emergency codes: If start new job without P45, employer uses 1257L M1/W1 emergency code - update HMRC ASAP to switch to cumulative!
Independent charity providing free, impartial advice on UK income tax in plain English (easier to understand than HMRC technical guidance). Topics: Income tax basics (how it works, rates, allowances, payslips explained), PAYE problems (wrong tax code, emergency tax, overpayments, P800 refunds, how to challenge), Self Assessment help (who needs to file, registering, deadlines, what to include, common mistakes), tax credits and Universal Credit (how income affects claims, reporting changes, overpayments), student loan repayments (when start paying, rates, employer deductions, Direct Debit issues), pension tax relief (how to claim if higher rate, salary sacrifice vs relief at source, annual allowance), National Insurance (Class 1/2/4, rates, credits, gaps in record). Also covers: Dealing with HMRC (how to contact, complaints procedure, appealing decisions, time to pay arrangements if can't afford tax bill), tax debts (payment plans, write-offs in hardship, bankruptcy implications), bereavement and tax (dealing with deceased's tax affairs, widowed parent allowance), employment status (employed vs self-employed for tax, IR35 for contractors). Includes: Step-by-step guides with screenshots, template letters to HMRC, case studies with realistic UK scenarios, benefits calculator (how tax changes affect net income), local Citizens Advice office finder (face-to-face appointments, phone advice, webchat). Free, impartial, no conflicts of interest. Help also available in Welsh, British Sign Language, accessible formats.
Official HMRC telephone helpline for income tax enquiries. Phone: 0300 200 3300 (Monday-Friday 8am-6pm, closed weekends/bank holidays, calls charged at local rate, same cost from mobiles and landlines). Welsh language service: 0300 200 1900 (Dydd Llun - Dydd Gwener 8am-6pm). Overseas callers: +44 135 535 9022. Textphone (hearing/speech impaired): 0300 200 3319. What they help with: Tax codes (check correct, update after job change, fix emergency codes W1/M1), PAYE queries (how much tax paid this year, P45/P60 questions, company benefits tax), Personal Tax Account (set up Government Gateway, reset password, navigate portal), Marriage Allowance (check eligibility, apply by phone, backdate claims), Self Assessment registration (get UTR number, deadline questions, how to file), tax refunds (P800 queries, claim overpayments, payment methods), pension tax relief (claim higher rate relief, annual allowance questions), Child Benefit High Income Charge (register for Self Assessment, calculate charge, stop claiming vs pay charge). What they DON'T help with: Self Assessment filing itself (use online portal or accountant), complex tax planning (consult tax adviser), tax credits (separate helpline 0345 300 3900), National Insurance (separate helpline 0300 200 3500). Wait times: 10-30 minutes typical (busiest January-April tax year end, September-October Self Assessment registration, quietest May-July). Alternative: Personal Tax Account online (instant for tax code checks, refund status, Marriage Allowance claims - faster than phone!), webchat service (available some days, check website). Prepare before calling: Have National Insurance number, UTR if self-employed, recent payslip/P60, specific question written down, pen and paper for reference numbers given.
Reviewed by: Amanda Parker, ACA - Chartered Accountant & Tax Advisor
Credentials: ACA (ICAEW) | CTA (CIOT) | 15+ years in UK tax planning | Former Big 4 tax senior manager
Expertise: Personal tax, self-assessment, tax planning for high earners, HMRC compliance
Last updated: - Updated for 2025/26 tax year
Our income tax calculator uses HMRC's official 2025/26 tax rates and thresholds, updated annually each April. All calculations follow PAYE regulations for employed individuals and self-assessment rules for the self-employed.
Complete your tax planning with these essential UK calculators for optimizing income, tax, pensions, and investments.
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✓ Expert Reviewed — This calculator is reviewed by our team of financial experts and updated regularly with the latest UK tax rates and regulations. Last verified: January 2026.