How Our Tax Calculators Work: Methodology (2025/26)

Data sources (all 2025/26)

• National Insurance thresholds and rates: HMRC / gov.uk – Annex A
• Income tax rates and personal allowance: gov.uk – Income Tax rates
• Scottish income tax bands: Scottish Government – 2025/26 factsheet
• Inheritance tax nil rate band, exemptions and taper: gov.uk – Inheritance Tax
• Tax refund time limits: gov.uk – Claim a tax refund

1. Self-Employed National Insurance Calculator

Input: annual self-employed profit (net of expenses). Output: Class 2 status and Class 4 liability.

Class 2 (2025/26):
  profit < £6,845            → £0 due; voluntary £3.50/week (~£182/yr) available
  £6,845 ≤ profit < £12,570  → £0 (NI credits earned automatically)
  profit ≥ £12,570           → £0

Class 4 (2025/26):
  profit ≤ £12,570               → £0
  £12,570 < profit ≤ £50,270    → 6% × (profit − £12,570)
  profit > £50,270              → 6% × £37,700 + 2% × (profit − £50,270)
                                 = £2,262 + 2% × (profit − £50,270)

Total due = Class 2 (£0 for most) + Class 4

Notes: applies to sole traders only (limited company directors pay Class 1). Class 4 is not payable if you are over State Pension age at the start of the tax year.

2. Inheritance Tax Gift Calculator

Inputs: gift amount, years between gift and death, estate value at death (optional), exemption flags. Output: chargeable amount and IHT due.

Step 1  Recipient is spouse/civil partner or UK charity → exempt, £0.
Step 2  Annual exemption: £3,000 (unused allowance rolls over one year, max £6,000).
        The £250 small-gifts exemption applies only when the annual exemption
        is used elsewhere (HMRC: the two are mutually exclusive per recipient).
Step 3  chargeable_gift = max(0, gift − exemptions − wedding-gift allowance)
Step 4  total = max(0, chargeable_gift + estate − £325,000 nil rate band)
Step 5  Taper relief (only when total > 0):
        0–3 yrs 100% | 3–4 yrs 80% | 4–5 yrs 60% | 5–6 yrs 40% | 6–7 yrs 20%
Step 6  IHT = total × 40% × taper%

Wedding-gift allowances: child £5,000 · grandchild/great-grandchild £2,500 · between the couple £2,500 · anyone else £1,000. Gifts made more than 7 years before death are fully exempt.

3. Overpaid Tax (Refund) Calculator

Inputs: annual salary, tax deducted, tax code, location, optional pension contributions. Output: estimated overpayment or underpayment.

Personal allowance: £12,570; tapered by £1 per £2 of income above £100,000 (zero at £125,140).

England / Wales / NI (on taxable income):
  ≤ £37,700          → 20%   |  £37,700–£125,140  → 40%  |  above → 45%

Scotland 2025/26 (on total income, standard PA £12,570):
  Starter £12,571–£15,397 19%  | Basic £15,398–£27,491 20%
  Inter £27,492–£43,662 21%    | Higher £43,663–£75,000 42%
  Advanced £75,001–£125,140 45%| Top over £125,140 48%

Estimate = expected tax − tax already deducted (+ = likely overpaid, − = likely owes).
This is an estimate only; HMRC's P800 / Simple Assessment is the only authoritative figure.

Verification: 24 test cases, all passing

Every calculator's JavaScript is tested against hand-calculated expectations. Representative cases:

The full regression suite (24 cases) ships with the site and can be re-run at any time.

How we keep figures accurate

• Rates updated every April when the new tax year starts (2025/26 → 2026/27 etc.)
• Every page shows its last review date
• Reported errors are corrected within 48 hours (report an error)
• All calculators point to official sources rather than guesswork