Tax rates and thresholds shift from one tax year to the next. If you are a self-employed musician looking back at last year’s figures, you want them worked out with last year’s rates. That matters most at the moment you are trying to work out how much to put aside.
What’s new
Rates per tax year. Gigflow holds a separate set of income tax bands and National Insurance thresholds for each tax year from 2023/24 to 2026/27. The estimate uses the set for the year you are looking at.
The personal allowance taper. Above £100,000 of profit, the estimate reduces your personal allowance by £1 for every £2, until it reaches zero at £125,140.
Honest figures in a thin year. If your expenses were higher than your income, net profit shows as a negative number. The tax estimate itself never drops below zero.
How it works
Open your tax report and choose a tax year. Everything on the screen, including Total estimated tax, is worked out with that year’s rates. Switch to another year and the rates switch with it.
Two things to keep in mind. The estimate only knows about the self-employed profit you have recorded in Gigflow. If you have a salary or other income alongside your gigs, your real bill will differ, and the taper would start sooner than the app shows. And as the report says, it is an estimate based on HMRC rates and allowances. Your accountant has the final word.
Why it matters
Putting money aside for tax is hard enough on an irregular income. An estimate that uses the correct rates for the year in question gives you a more realistic figure to plan around, whether you are checking last year or the one you are in.
Related: Count your income when you’re paid, not when you play
