Accountants Guide
Top Cities
London (1618)
Birmingham (258)
Glasgow (234)
Manchester (215)
Bristol (200)
Nottingham (162)
Leeds (152)
Leicester (152)
Sheffield (133)
Harrow (128)
Belfast (115)
Edinburgh (114)
Ilford (105)
Liverpool (101)
Newcastle upon Tyne (96)
Reading (91)
Cardiff (88)
Southampton (82)
Norwich (79)
Stockport (76)
York (76)
Cambridge (74)
Bradford (73)
Colchester (67)
Preston (67)

All Cities

Home : UK Tax Guide : Personal Tax Guide



1. Can you explain income tax in simple terms?
Income tax is the amount of money that you have to pay... Income tax is the amount of money that you have to pay the government based on the wages that you earn. If you are an employee, your employer will deduct the appropriate amount of taxes from your earnings. If you are self-employed, you do need to pay income tax on your earnings. Anyone that is retired and collects a pension income also has to pay income tax on this money.

Not all income is taxable and your entire income will never be taxed. In the UK , there is no minimum age level for paying taxes, but if your earnings are below a certain level, you won't have to pay any tax.

There are several different schedules to follow when filing your income tax forms. The schedules you use depend on the type of income that you have. The most commonly used schedules are Schedule E for employees and Schedule D for those that are self-employed.


2. How does the government calculate income tax?
Calculating income tax involves five basic steps... [more]


3. What income is exempt from tax?

Some examples of income on which you do not have to pay any tax include:

    • Premium bind prizes
    • Housing benefits
    • Child tax credits
    • Interest from savings
    • Money from personal injury awards
    • Strike pay
    • Student grants
    • Home improvement grants


4. What are tax allowances?
Everyone is entitled to a basic tax allowance in the UK... [more]


5. Is it necessary to file an income tax return?
If your employer deducts taxes from your wages and this is your only form of income, then there is no need to file an income tax return. However, if you are self-employed or are not part of the PAYE system, then you first need to complete a self-assessment form to see whether or not you do have to pay income tax.

If as a result of the self-assessment form, the Inland Revenue determines that you have income that should be taxed, you will receive the appropriate tax form to complete. You also have a responsibility to request a tax form if you think that you do have taxable income. The self- assessment form contains a main section for everyone and then additional pages specific to each type of income that you have.


6. What about income that I have already paid the taxes on?
When you are calculating the amount of tax that you owe, you also have to work out whether or not you have already paid tax on your income. Some of the income you have coming in may already have tax taken out of it. What you have to do is add in the tax to the income, because this makes up the income from which you can deduct your allowances.


7. What are National Insurance contributions?
National Insurance Contributions go towards paying for your health care. As long as you live and work in Great Britain or Northern Ireland and you are below pensionable age, then you do have to pay National Insurance Contributions. The amount that you pay depends on your earnings. There is an upper and a lower limit, called thresholds and these are adjusted each year. If you are self-employed you have to pay these contributions unless you only have very small earnings or you have been exempt from doing so.


8. How long does one need to keep tax records?
You should keep all records related to your earnings and your taxes for the current year so that you have all the documents you need when it comes time to file an income tax return. Once you do file the return, you must keep all your records for 24 months.


9. How is Inland Revenue tax collected?
You should keep all records related to your earnings and your taxes for the current year so that you have all the documents you need when it comes time to file an income tax return. Once you do file the return, you must keep all your records for 22 months.


10. Do seniors over the age of 65 have to pay taxes?
You do have to pay tax on your income when you reach the age of 65, but your allowances are also higher. This may in fact reduce the amount of tax for which you are liable. Social security pensions, occupational pensions and bank interest are taxable forms of income which you total and then deduct the allowances.

Most Viewed Accountants
Atkinsons
Trevor Jones
Atkinsons Chartered Accountants
Fawcett & Co
M Novakovic & Co
Deloitte
Brian Green & Co
David Webb & Co
Kanti Patel & Co
Farooqui & Co Ltd
 
Highest Rated Accountants
Bretherton & Co

C Goumal & Co
R J Bradshaw & Co
Bridgen Watkins & Wainwright
Ryans
Thomson Morley Jackson & Co
Alton & Co
The J M H Partnership
B M Howarth
Home | UK Accountants | Accountants Search | Accountants Firms
copyright 2007, www.accountants-guide.co.uk, All rights reserved. Privacy Policy