Over at Money.co.uk they’ve recently published an article about how singles can cut their costs, or even earn a little extra income. It’s full of useful tips – some of which you may already be doing but others you might not have thought about.

While looking for a new job or getting a pay rise can be a great way of increasing your disposable income each month, saving on bills is just as effective and is often easier! If you’d like to read more, check out 10 Easy Steps to Cut The Cost Of Single Living

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Over on our sister site Employed and Self Employed, we now have a Limited Company Tax Calculator. If you are self employed through a limited company (as many people, like IT contractors, can be), then your tax is worked out differently from if you are just plain-old self employed. The limited company pays you a salary, which is typically quite small, and the rest of the company’s profits are paid to you in dividends (after the company has paid corporation tax), which are taxed at different rates from other income. The following graph shows you a comparison of how much income you get to take home as self employed or with a limited company (click on the image for a larger version).

Limited Company vs Self Employed comparison

Click the image for a larger, interactive version

As you can see, in this example (with typical values entered), the limited company approach allows you to take home more of your income. However, this does come at a cost – more paperwork is required for limited companies, including registering with Companies House and having your books prepared by an accountant. Accountant’s fees might eat up a significant amount of the difference in take-home, so it might not be worth switching from one to another. If you’re interested in being self employed as a limited company, speak to an accountant to find out if it is right for you.

To start performing tax calculations, check out the limited company tax calculator over at Employed and Self Employed.

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I know a number of you use The Salary Calculator to compare two salaries – for example, if you are looking for a new job or are going for a promotion. To make this easier for you, the Two Salaries Comparison Calculator has been created, which allows you to enter two salaries (along with all your details about tax code, pensions and so on) and see what a difference it will make to you over the year, and each month. You can compare each deduction, such as tax and National Insurance, and see how they affect the take home pay for the old and new salaries.

Get started comparing salaries over here!

Later today, the Chancellor will deliver his 2014 Budget to parliament, setting out his plans for the next few years. The Budget is the Chancellor’s opportunity to explain his policies and how they will affect the economy as a whole, and also what differences will be felt by ordinary members of the public.

He is likely to make much of the fact that the tax-free personal allowance (how much you can earn without paying income tax) has increased to £10,000 from April 2014, a coalition pledge delivered 1 year early. There is also talk that he might announce plans to raise the threshold for 40% tax (the amount at which you start paying income tax at 40% rather than 20%) in future years. This would probably lower the tax paid by those in middle management positions, say, and those in more senior roles.

The income tax and National Insurance rates which will take effect from 6th April 2014 have already been applied to The Salary Calculator, so you can easily see how your take home pay will be affected by the new tax year. You can also view a side-by-side comparison of 2013 and 2014 so you can see where the differences come from.

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The Salary Calculator has been updated with the latest tax information which takes effect from 6th April 2014.

There is an increase in the default tax free personal allowance from £9,440 to £10,000, which will reduce the amount of tax due for most taxpayers. Slight increases in the National Insurance thresholds will also help improve the takehome pay for many people.

The most significant change is probably the increase in the repayment threshold for plan 1 student loans from £16,365 per year to £16,910, which will save those repaying their loan nearly £50 over the year. Unfortunately of course, this will just mean it will take longer to repay the loan in the long run but hopefully the extra cash in your pocket will be useful now!

Another significant change this year, which is unlikely to affect any but those who are well paid and nearing retirement, is a reduction in the maximum amount you can put into a pension while still claiming full tax relief – for 2013/14 this limit was £50,000 but from 2014/15 it will be £40,000. If this is likely to affect you, you still have time to make the most of the 2013/14 pension allowance before the end of the tax year!

To see how you will be affected by the new tax rates, go to The Salary Calculator and choose the 2014/15 tax year from the drop-down box. Alternatively, you can view a side-by-side comparison of 2013 and 2014 tax rates.

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