Self employed tax calculations

[alanweb]

Hi all I’ve been looking into the maths on platform cuts and tax eg Uber Etsy Deliveroo etc and have made a very simple tax calculator that works out take home pay. The web page is on

Netlify , it’s free , there are no adverts on it and you can load it from your phone. I just wondered if I could get any feedback on it from guys like you who could maybe use the calculator.

You can find it at



side-hustle-selfemployed-tax-calc.netlify.app







Thanks for reading, Alan

 

[AI Helper]

Nice idea, Alan. Gig platform workers are exactly the group who get caught out at Self Assessment time, so a free, ad-free tool for that audience fills a real gap. A few points worth checking against what the calculator currently does, since these are the areas where most simple calculators go wrong.

Things the maths needs to handle

• Other income. Most Uber, Etsy and Deliveroo earners also have a PAYE job. The side hustle profit sits on top of that salary, so it can land in the 40% band even if the hustle itself is small. A field for employed income is essential or the result will be badly understated.
• Scottish rates. Scotland has six income tax bands with different rates and thresholds. National Insurance stays UK-wide, but income tax does not. A simple England/Wales/NI vs Scotland toggle would sort it.
• Class 2 and Class 4 NICs. Class 2 is now treated as paid for profits above the small profits threshold (£6,725), and Class 4 is 6% between £12,570 and £50,270 then 2% above. Make sure those figures match the current tax year and are dated on the page.
• Trading allowance. The £1,000 allowance can be claimed instead of expenses, not alongside them. Many small Etsy sellers are better off with the allowance; a delivery rider with high mileage is usually better off claiming actual costs. Showing both options side by side would be genuinely useful.
• Payments on account. Once the bill goes over £1,000, HMRC asks for 50% of next year's estimate up front. First-year sellers get a nasty shock here, so flagging the cash flow impact would add real value.
• Student loans. Plan 1, 2, 4, 5 and postgraduate repayments all come through Self Assessment on self employed profits.

On the platform fee side, treating the platform's cut as an allowable expense is correct, but mileage (45p a mile for the first 10,000) is often the bigger deduction for drivers and riders, so a mileage input would be worth adding.

One last thought: platforms now report seller data to HMRC under the digital platform reporting rules, so a short note on the page explaining that HMRC already sees these figures would nudge users towards registering rather than ignoring it. Good luck with it.

 

[alanweb]

Nice idea, Alan. Gig platform workers are exactly the group who get caught out at Self Assessment time, so a free, ad-free tool for that audience fills a real gap. A few points worth checking against what the calculator currently does, since these are the areas where most simple calculators go wrong.

Things the maths needs to handle

• Other income. Most Uber, Etsy and Deliveroo earners also have a PAYE job. The side hustle profit sits on top of that salary, so it can land in the 40% band even if the hustle itself is small. A field for employed income is essential or the result will be badly understated.
• Scottish rates. Scotland has six income tax bands with different rates and thresholds. National Insurance stays UK-wide, but income tax does not. A simple England/Wales/NI vs Scotland toggle would sort it.
• Class 2 and Class 4 NICs. Class 2 is now treated as paid for profits above the small profits threshold (£6,725), and Class 4 is 6% between £12,570 and £50,270 then 2% above. Make sure those figures match the current tax year and are dated on the page.
• Trading allowance. The £1,000 allowance can be claimed instead of expenses, not alongside them. Many small Etsy sellers are better off with the allowance; a delivery rider with high mileage is usually better off claiming actual costs. Showing both options side by side would be genuinely useful.
• Payments on account. Once the bill goes over £1,000, HMRC asks for 50% of next year's estimate up front. First-year sellers get a nasty shock here, so flagging the cash flow impact would add real value.
• Student loans. Plan 1, 2, 4, 5 and postgraduate repayments all come through Self Assessment on self employed profits.

On the platform fee side, treating the platform's cut as an allowable expense is correct, but mileage (45p a mile for the first 10,000) is often the bigger deduction for drivers and riders, so a mileage input would be worth adding.

One last thought: platforms now report seller data to HMRC under the digital platform reporting rules, so a short note on the page explaining that HMRC already sees these figures would nudge users towards registering rather than ignoring it. Good luck with it.

Thanks for the reply I have since updated the calculator to include optional 6% NI into the tax (20/26%) a mileage allowance reminder for Uber drivers etc and a message re HMRC sharing data with some platforms.the gross income section should include all gross income and the platform cuts are calculated if selected , before you get to the (net profit) box which the tax and/or NI contributions are taken from at the selected rate , giving take home pay I have not incorporated the Scotland issue as yet but would appreciate your feedback can I leave a web address for you to check as it’s now on vercel ?

 

[AI Helper]

Post the address up in the thread, Alan. Plenty of members here run side businesses alongside a day job, so you'll get more useful testing from a spread of people than from one pair of eyes. Just keep it clearly framed as "please test this" rather than a promo and nobody will mind.

Based on what you've described, a few things stand out before anyone starts clicking.

The flat rate approach is the weak spot

Letting the user pick 20% or 26% (20% tax plus 6% Class 4) and applying that to the whole net profit figure will give the wrong answer for almost everyone. Tax and NI are banded, not flat:

• The first £12,570 of total income is covered by the personal allowance, so 0% income tax.
• Class 4 NI only starts once profits pass £12,570, and drops to 2% above £50,270.
• Income tax steps up to 40% above £50,270 and 45% above £125,140, with the personal allowance tapering away from £100,000.

A rider earning £8,000 profit with no other income pays nothing at all. Your calculator at 26% would tell them they owe £2,080. Someone with a £40,000 PAYE job and £15,000 Etsy profit has part of that profit taxed at 40%, so 20% understates it. The fix is to drop the "select a rate" idea and have the tool apply the bands itself. It's a few extra lines of code and it's the difference between a rough guess and something people can actually plan around.

Separate employed income from platform income

You've said the gross income box should include all gross income. That causes two problems:

• The platform cut percentage would be applied to a PAYE salary, which is nonsense.
• PAYE income has already had tax deducted at source, so adding it to the profit and taxing it again double counts.

Better structure: one field for employed salary (used only to work out which band the side hustle profit lands in), then separate fields for platform gross, platform fee percentage, mileage and other expenses. The tax calculation then runs on total income but only the self employed share of the bill is shown as what's owed through Self Assessment.

Smaller points

• Trading allowance versus expenses. Still worth building in. If total expenses (including platform fees and mileage) are under £1,000, the user should claim the allowance instead. The tool can work that out automatically and tell them which is better.
• Mileage as a reminder only. A reminder is fine, but an actual input box would make it useful. 45p a mile up to 10,000 miles, 25p after that. Deliveroo cyclists get 20p a mile.
• Class 2. Nothing to pay now for profits above £6,725, but anyone below that may want to pay voluntarily (around £3.50 a week) to protect their State Pension record. A one-line note covers it.
• Payments on account. If the bill comes out above £1,000, show the January payment as bill plus 50%, and the July payment as another 50%. That's the figure that actually hits people's bank accounts.
• Date stamp. Put the tax year on the page. Thresholds change every April and an undated calculator gets stale fast.

Scotland can wait until the banded calculation is in place, because once you've written that logic properly, adding a second set of bands for Scottish users is a small job rather than a rewrite.

Stick the link up and let people test it with their own numbers. That's where you'll find the edge cases.

 

[alanweb]

Thanks How do I post into thread?

 

[alanweb]

Thanks How do I post into thread?

I need to make 20 posts first I think?

 

[alanweb]

Nice idea, Alan. Gig platform workers are exactly the group who get caught out at Self Assessment time, so a free, ad-free tool for that audience fills a real gap. A few points worth checking against what the calculator currently does, since these are the areas where most simple calculators go wrong.

Things the maths needs to handle

• Other income. Most Uber, Etsy and Deliveroo earners also have a PAYE job. The side hustle profit sits on top of that salary, so it can land in the 40% band even if the hustle itself is small. A field for employed income is essential or the result will be badly understated.
• Scottish rates. Scotland has six income tax bands with different rates and thresholds. National Insurance stays UK-wide, but income tax does not. A simple England/Wales/NI vs Scotland toggle would sort it.
• Class 2 and Class 4 NICs. Class 2 is now treated as paid for profits above the small profits threshold (£6,725), and Class 4 is 6% between £12,570 and £50,270 then 2% above. Make sure those figures match the current tax year and are dated on the page.
• Trading allowance. The £1,000 allowance can be claimed instead of expenses, not alongside them. Many small Etsy sellers are better off with the allowance; a delivery rider with high mileage is usually better off claiming actual costs. Showing both options side by side would be genuinely useful.
• Payments on account. Once the bill goes over £1,000, HMRC asks for 50% of next year's estimate up front. First-year sellers get a nasty shock here, so flagging the cash flow impact would add real value.
• Student loans. Plan 1, 2, 4, 5 and postgraduate repayments all come through Self Assessment on self employed profits.

On the platform fee side, treating the platform's cut as an allowable expense is correct, but mileage (45p a mile for the first 10,000) is often the bigger deduction for drivers and riders, so a mileage input would be worth adding.

One last thought: platforms now report seller data to HMRC under the digital platform reporting rules, so a short note on the page explaining that HMRC already sees these figures would nudge users towards registering rather than ignoring it. Good luck with it.

Thanks

 

[AI Helper]

No problem at all, Alan. On the posting question, the restriction you've hit is a standard anti-spam measure on most forums. New accounts get blocked from posting clickable links until they've built up a bit of history. It stops bots dropping spam on day one, but it does catch genuine members like yourself.

A couple of ways round it

• Post the address as plain text without the https part, exactly as you did with the Netlify version at the top of this thread. That went through fine. Something like

  yourname-tax-calc.vercel.app

  with spaces or brackets in it if the filter is strict. Members can copy it into their browser.
• Send a message to one of the moderators explaining what the tool is and asking whether they'd allow the link, given it's free and ad-free. Mods are usually happy to help when it's a genuine contribution rather than a sales pitch.
• Keep the tool on the original Netlify address as well, since that one is already visible in this thread and people will find it from there.

Meanwhile, a practical suggestion

While you're waiting, try running a few test cases through the calculator and posting the inputs and outputs here as text. For example: a Deliveroo rider with £9,000 gross, 15% platform fee, 4,000 miles, no other job. Or an Etsy seller with a £35,000 salary and £6,000 of shop sales. If the numbers come back correct for those scenarios, members can confirm them, and if they don't, the mistakes will be obvious without anyone needing to click anything. That's arguably more useful feedback than people poking at the interface anyway.

Once the banded tax logic is working and the PAYE salary field is separated out, it would be worth coming back and posting an update. Tools like this tend to get a steady stream of users around January when the Self Assessment deadline looms, so getting the maths right over the next couple of months would put it in a good position.

 

[alanweb]

Thanks

 

[alanweb]

No problem at all, Alan. On the posting question, the restriction you've hit is a standard anti-spam measure on most forums. New accounts get blocked from posting clickable links until they've built up a bit of history. It stops bots dropping spam on day one, but it does catch genuine members like yourself.

A couple of ways round it

• Post the address as plain text without the https part, exactly as you did with the Netlify version at the top of this thread. That went through fine. Something like

  yourname-tax-calc.vercel.app

  with spaces or brackets in it if the filter is strict. Members can copy it into their browser.
• Send a message to one of the moderators explaining what the tool is and asking whether they'd allow the link, given it's free and ad-free. Mods are usually happy to help when it's a genuine contribution rather than a sales pitch.
• Keep the tool on the original Netlify address as well, since that one is already visible in this thread and people will find it from there.

Meanwhile, a practical suggestion

While you're waiting, try running a few test cases through the calculator and posting the inputs and outputs here as text. For example: a Deliveroo rider with £9,000 gross, 15% platform fee, 4,000 miles, no other job. Or an Etsy seller with a £35,000 salary and £6,000 of shop sales. If the numbers come back correct for those scenarios, members can confirm them, and if they don't, the mistakes will be obvious without anyone needing to click anything. That's arguably more useful feedback than people poking at the interface anyway.

Once the banded tax logic is working and the PAYE salary field is separated out, it would be worth coming back and posting an update. Tools like this tend to get a steady stream of users around January when the Self Assessment deadline looms, so getting the maths right over the next couple of months would put it in a good position.

Thankyou

 

[AI Helper]

You're welcome, Alan. Since you can't post the link yet, here are two worked examples with the correct answers so you can check the calculator against them straight away. If your tool matches these, the core logic is sound.

Example 1: Deliveroo cyclist, no other job

• Gross £9,000, platform fee 15% = £1,350
• 4,000 miles by bike at 20p = £800
• Total expenses £2,150, so claiming actual costs beats the £1,000 trading allowance
• Taxable profit £6,850
• Income tax: £0 (under the £12,570 personal allowance)
• Class 4 NI: £0 (under £12,570)
• Class 2: nothing to pay, but profit is above £6,725 so the State Pension year is credited automatically
• Tax bill: £0

Example 2: Etsy seller with a £35,000 salary

• Shop sales £6,500, platform fees 10% = £650, packaging £200
• Total expenses £850, under £1,000, so the trading allowance is the better option
• Taxable profit £5,500
• Salary already uses the personal allowance, so all £5,500 is taxed at 20% = £1,100
• Class 4 NI: £0 (profit alone is under £12,570; the salary does not count towards Class 4)
• Bill £1,100, which triggers payments on account
• January payment: £1,100 plus £550 = £1,650. July payment: £550

That second example is the one that catches people out. A flat 26% would say £1,430 and miss the fact that the real January cash hit is £1,650.

Scottish version of Example 2 for later: the £5,500 straddles the 20% basic band and the 21% intermediate band at those income levels, so the bill comes out slightly higher. Worth parking until the England/Wales/NI figures are right.

Post the results back here when you've run them through.