Quick check - Am I on the right path

The main omissions to this are described below. Subject to those, the rules to follow are very simple.

  • HMRC (and our society) needs to tax us all on almost all of our income. If you have a large chunk of income that appears to not be taxed, then you have probably not got the right calculation.
  • Income will fall into one of the three columns (or CGT which we cover separately).
  • As your total income increases, the percentage tax rate tends to rise. Having a high income in any form tends to push up the tax rate for other forms of tax.
  • In the main, receiving a non salary benefit will trigger an increase in your tax bill. This is covered below.


Other Factors:

There are of course complexities. My totally unscientific “watch list” includes items which may trigger a complexity to impact the calculation. If any of the following apply to you then please take note, you should get some advice:

  • The government tends to reduce tax on matters to do with children, in the main child care. Child tax credit is something to get an understanding of if you are a low earner. We will add details at a later date.
  • Similarly, a registered disability tends to gain lower taxation. We will add details at a later date.
  • Finally, it might just be me but the treatment of lower earners seems complex. We will add a description of working tax credit at a later date. It seems an unintended consequence of the taxation system that those most likely to need help have the greatest complexity to wade through.
  • Saving for retirement (ie pension contributions) tend to get tax advantages. There are also savings products, such as ISA which we cover in the savings section.