Methodology

Deterministic formulas, not AI

Every result is produced by a fixed formula written in code. Nothing is estimated by a language model or generated on the fly. Put the same numbers in tomorrow and you will get exactly the same answer, and the formula used is described in the "How we calculated it" section of each calculator.

Statutory rates held in one place

Tax rates, thresholds and allowances are never written into the pages themselves. They live in a single ruleset for each tax year, the current one being 2026/27, which every calculator reads from. That means a rate change is made once and flows through to every page that depends on it.

Old rulesets are kept rather than overwritten. When a new tax year begins we add a new ruleset alongside the existing ones, which also lays the groundwork for calculating earlier years.

Sources

Statutory figures come from published UK government and HMRC material. Each statutory calculator links the sources it relies on, and the full list is on the sources page. Where guidance is ambiguous we follow HMRC's stated method rather than a simplification.

Automated testing, including the awkward edges

Each calculation engine has an automated test suite that runs whenever the code changes. Alongside ordinary cases, the tests cover zero values, decimals, very large numbers and invalid input.

Statutory calculators are also tested at the exact points where behaviour changes, just below a threshold, exactly on it, and just above. For Corporation Tax that means £49,999.99, £50,000.00 and £50,000.01, and the same treatment at £250,000. Those boundaries are where calculators most often get things wrong.

Exact calculations and estimates

Some calculations are exact arithmetic: VAT on a price, margin from a cost and a price, a break-even point. Others are estimates of a tax position, such as salary versus dividends or sole trader versus limited company, because the real answer depends on circumstances the calculator does not know about, such as pension contributions, student loans, benefits in kind or other income.

Where a result is an estimate, the page says so and lists what has been assumed and what has been left out.

Travel and mileage rates

Mileage rates are held per tax year with the source and the date they were checked, and the two regimes are kept apart: Approved Mileage Allowance Payments for a vehicle the driver owns, and simplified expenses for the self-employed. Company car fuel uses HMRC's advisory fuel rates, which are reviewed quarterly and stored by effective period, so a journey date selects the rate that actually applied. We never treat an advisory fuel rate as a mileage allowance, or the other way round.

Dividends, VAT registration, holiday and CIS

Dividends are taxed after all other income, so the calculator fills the bands with salary first, then applies the Dividend Allowance at 0% before the ordinary, upper and additional dividend rates. Dividend rates are UK-wide even for Scottish taxpayers, whose other income is taxed at Scottish rates.

VAT registration uses the rolling 12-month taxable turnover test as the main measure, with the 30-day forward-looking test kept separate rather than merged into it. Any projection of when the threshold might be reached is clearly labelled as an estimate.

Holiday entitlement is the statutory 5.6 weeks, capped at 28 days where the calculation is in days, pro-rated by the actual number of days employed within the leave year so leap years are handled correctly. Irregular-hours and part-year workers accrue leave under a separate statutory method, which we do not model rather than approximate.

CIS deductions are taken from labour only: VAT is removed first, then the direct cost of qualifying materials, before the 0%, 20% or 30% rate is applied to what remains.

Rates we cannot yet evidence

If a figure is required by law but we have not verified it against a primary source, we do not guess it. Statutory late-payment interest is the Bank of England reference rate plus 8 percentage points; we record a reference rate only once it is checked against the published source, together with the six-month period it applies to and the date it was checked. Where no verified rate covers a date, the calculator asks you to enter the rate that applied rather than showing an invented one, and a manual override is always available.

Rounding

Money is calculated at full precision and rounded to the nearest penny for display, so rounding differences do not accumulate through a calculation. Break-even units are rounded up, because you cannot sell part of a unit and still cover your costs.

Errors and unusable input

A calculator will never show you a meaningless result. If the figures cannot produce a sensible answer, a selling price below the variable cost for example, the page explains the problem in plain English instead of displaying a broken number.

Commercial relationships

Where we recommend a product or service we may earn a commission. That never changes a mathematical result. Calculations are produced independently of any commercial arrangement, and no commercial module appears on a page unless there is a genuine, approved partner behind it. See our affiliate disclosure.

Corrections

If you think a figure is wrong, please tell us through the contact page. We would rather fix an error quickly than defend it.