By Yisroel Sulzbacher, ACCA Accounts Senior

HM Revenue & Customs (HMRC) offers a range of digital tools to help you manage and understand your tax obligations.

Whether you are a business owner, self-employed, or an employee, these tools provide quick estimates and great insights to help you navigate your tax requirements more effectively.

While these tools offer a useful starting point, they should not replace professional advice.

Every financial situation is unique, and only a qualified accountant can provide you with a complete and accurate picture of your tax liabilities.

With that in mind, here are some of the most useful HMRC tools and why they might be worth checking out:

1. Income Tax tools

There are two HMRC tools we suggest for estimating your Income Tax liabilities:

• Check Your Income Tax
• Estimate Your Income Tax

The first allows you to check your tax code, Personal Allowance, and estimated Income Tax for the current year.

It also enables you to update your income details and see if your tax code has changed.

The second allows you to estimate your Income Tax and National Insurance contributions for the current tax year which is especially useful for those on Pay-as-you-Earn (PAYE) as it gives you the opportunity to do take-home pay calculations.

2. VAT registration estimator

The VAT registration estimator helps businesses work out the impact of registering for VAT on their finances.

It provides insights into when you might need to register and the potential effects on your profits.

Bear in mind that your business must register for VAT if:

• Your VAT taxable turnover for the past 12 months exceeds £90,000 (this was £85,000 until last year).
• You expect your turnover to exceed £90,000 in the next 30 days.
• You run an overseas business supplying goods or services to the UK (or expect to in the next 30 days), regardless of your VAT taxable turnover.

The VAT tool also links to additional resources about the VAT registration process, which is always useful.

3. HMRC’s basic PAYE tools

HMRC offers Basic PAYE Tools, which acts as low-level payroll software designed for businesses with fewer than ten employees.

Fundamentally, they allow you to perform essential payroll tasks, such as calculating tax and National Insurance contributions and submitting this information to HMRC.

If you already have payroll software but need additional functionality, basic PAYE tools can be used alongside it to:

• Check a new employee’s National Insurance number
• Send an Employer Payment Summary (EPS)

Helpfully, the latest version of the PAYE tool updates automatically, usually when the tax year changes or new rules are introduced, which is really helpful.

However, the PAYE tools have limitations.

You will need a more comprehensive payroll software, or to outsource this to an accountancy firm, if you are running a larger business.

Before using any of the tools, you must also be registered as an employer with HMRC and have a login for PAYE Online.

(This is not the case with the other tools listed in this article).

4. National Insurance tools

There are two key tools for National Insurance, depending on your circumstances:

• The National Insurance Contributions Calculator
• The Director’s National Insurance Contributions Calculator

The first tool helps employees calculate their National Insurance contributions and assists business owners in determining how much to deduct at source from employees’ salaries.

However, other payroll deductions, such as student loans and child maintenance, may also apply, so this tool should be used as a guide rather than a final calculation.

The second tool is specifically for company directors to check their contributions.

Again, there may be other factors that influence your contributions so you should take the response with a pinch of salt.

5. The Self-Employed Tax Calculator

If you are self-employed, HMRC provides a great tool that estimates your Self-Assessment tax bill.

Self-employment tax calculations can often be more complex than those for large businesses, and self-employed individuals are responsible for managing their own compliance.

As such, the Self-Employed Tax Calculator is incredibly useful for a quick check of your liabilities.

FFT assists many clients with tax filing and would be happy to help you manage your Self-Assessment this year.

6. The HMRC app

The HMRC app offers many of the same functionalities as the online tools but provides a convenient way to manage tax details on the go.

Within the app, you can:

• Check your tax code
• Estimate tax payments
• Access your personal tax account

All of these tools are designed to simplify your tax management and provide clear guidance on various tax-related issues, helping both you and your business stay compliant with HMRC’s requirements.

However, these tools will never be able to offer the same level of tailored advice and strategic tax planning as an accountant.

While they provide a basic overview, they do not offer the protection and insight that a qualified tax adviser can provide.

For personalised advice on your tax obligations, speak to an expert at FFT today.