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Income Tax Laws UK Guide

This section has information on all matters of Income Tax laws and personal taxation. It also includes guidance on tax rates, refunds, allowances, and tax codes. Browse through the list of tax laws and click through from any topic to get further help and expert advice about taxation issues.

INCOME TAX RULES: Our taxes generate one of the biggest revenues for central government in the United Kingdom.

Tax revenue also comes in from National Insurance (NI), Value Added Tax, Corporation Tax, and excise duties.

United Kingdom fiscal year of 2017/18 showed the total government tax receipts to be around £594 billion. That equates to more than 30 percent of the country’s Gross Domestic Product (GDP).

Local government in England and Wales collect further revenue. It comes via business rates, Council Tax, and the fees from on-street parking.

This may not be welcome news for all citizens living in Great Britain. Even so, very few will avoid paying personal or business tax in some form or another.

A Guide to Income Tax and Taxation

Allowance for Blindness

The Blind Person Tax Allowance means severely sighted people can earn more money before tax. Check if you qualify and how to claim the concession.

Claiming Tax Refunds

There are several reasons why you might need to claim a tax refund or rebate. Find out how to get money back after paying too much Income Tax.

Company Car Tax

Company Cars

Employers need to work out the taxable value (BIK rate) for reporting to HM Revenue and Customs. It applies to company cars or fuel that you make available for private use by your employees.

As a rule, ‘private use’ also includes any journey between home and work by your staff. An exception would be traveling to temporary places of work.

As an employer, you can calculate the taxable value of a company car yourself. You can use commercial payroll software or the HMRC car and car fuel benefit calculator. You can also work out the value ‘manually’ using the P11D working sheet 2.

Taxable Values

The taxable value of a car is not the same as its cost. Taxable value depends on the fuel type as well as the level of CO2 emissions for the vehicle. It also applies to the amount of time it is unavailable during the tax year (e.g. a mechanical fault).

Employing Domestic Helpers

Check if you would get considered as an employer of your au pair, nanny, or childcare worker. The section explains the rules for employing someone to work in your home.

Get Help with Tax

Tax Codes

Check out a list of tax codes and what they mean when employers work them out. Check what you should do any time you think your tax code is wrong.

Tax Help for Beginners

UK taxation can be a little bit taxing at times. This guide is for those who need some extra help with tax problems and issues with taxes.

Income Tax Guide

A Taxation Overview

In simple terms Income Tax is a form of taxation paid on your earnings. Find out how to pay Income Tax and how to ensure you pay the correct amount to HM Revenue and Customs.

Cryptoasset Exchange Tokens

This guide explains how to check if you need to pay tax when receiving crypto assets – and what records you would need to keep.

Leaving the United Kingdom

Some important changes will happen to your tax if you leave the UK to live abroad. Check what steps you must take if you go to work or retire overseas of the United Kingdom.

UK Tax while Living Abroad

Check the liabilities of tax on UK income if you live abroad. Find out whether you will need to pay tax on income from rental and investments while living overseas.

If You Return to United Kingdom

Check the process for tax if you return to the UK after living abroad. Find out what you need to do after coming back to live in the United Kingdom.

If You Come to Live in United Kingdom

Check the basic rules for tax if you come to live in the United Kingdom. Find out how to pay tax on sources of income, make tax returns, and pay National Insurance.

Income Tax Rates and Personal Allowances

Current Tax Rates

The guide explains the current tax allowance for citizens living in the United Kingdom. Find out how tax bands and thresholds work for Personal Allowances.

Checking Income Tax

Use the government tool to check your Income Tax or Personal Allowance for the current year. You can also estimate your tax for the current year and change the code if it is incorrect.

NI and Tax for Pensioners

The section explains government National Insurance and tax after State Pension age. Check the age-related tax allowances and how to calculate tax if you continue working.

Tax on Dividends

You might need to be paying tax on dividends paid to you through shares you own in a company. How much you get taxed on dividend payments depends most on your taxable income.

Individual Savings Account (ISA)

ISA Rules

Find out how Individual Savings Accounts work and what types of ISA you can invest in. Check how to optimise the tax-free allowance, withdraw money, and transfer ISAs.

Lifetime ISA Rules

There are several reasons to invest in a Lifetime ISA. But, the big advantage of Lifetime ISAs is the tax free saving for a first home and for later life.

Married Couples Allowances

Marriage Tax Allowance

Registration for the Marriage Allowance first opened in April 2015. The tax break allows you to transfer a part of your Personal Allowance to your spouse or civil partner.

Once you apply for a marriage allowance you will receive an email confirming your application. When you apply you need both National Insurance numbers and a method of proving your identity.

Married Couple’s Allowance

MCA is a tax perk for qualifying couples where one partner is over the age of 82. So, the Married Couple’s Allowance is ‘restricted’ but it could cut 10% off your tax bill this year.

Pensions and Taxation

Inherited Pension Tax

There may be liability for tax on a private pension you inherit from someone’s death. Review the current procedure for paying taxes after inheriting a private pension.

Tax on Pension Contributions

Personal investments paid into private pensions are tax-free. But, some limits apply to tax relief on private pension contributions.

Tax when You Get a Pension

Many seniors ask us – do you pay tax on your pension payments? The help section explains your tax-free allowances and how you pay tax on pensions.

Self Assessment Tax Returns

The Self Assessment helpline section is for anyone who needs some extra guidance. It explains the new Self Assessment tax return rules for the current year.

Selling Services Online

You might need to pay tax on income gained from selling services online. The main reason is because the ‘sharing economy’ or a hobby business that you have, may be taxable.

Tax on Foreign Income (expats)

Information in the section explains UK taxation on money earned abroad. Check whether you need to pay tax on foreign income and investments.

Tax Reliefs

Income Tax Reliefs

There are several different ways for businesses to claim Income Tax reliefs. Find out how self-employed workers can either pay less tax or get Income Tax back.

Work Expenses

Some workers get confused and they will ask: how does tax relief for employees work? The help guide explains the process of claiming tax relief on expenses bought for work.

Income Tax Laws and Personal Taxation Guide for United Kingdom