{"id":29719,"date":"2022-10-20T11:12:31","date_gmt":"2022-10-20T11:12:31","guid":{"rendered":"https:\/\/wwconsults.co.uk\/?p=29719"},"modified":"2022-10-20T11:15:04","modified_gmt":"2022-10-20T11:15:04","slug":"tax-in-the-uk","status":"publish","type":"post","link":"https:\/\/wwconsults.co.uk\/en\/tax-in-the-uk\/","title":{"rendered":"Tax in the UK"},"content":{"rendered":"\t\t
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Before you can pay taxes in the UK, you need a\u00a0national insurance number<\/a>. Furthermore, you may also need to apply for a\u00a0Skilled Worker visa<\/a>\u00a0(formerly Tier 2 visa). Now that the UK has left the EU, this also applies to citizens of the European Economic Area (EEA). The deadline to apply for the free\u00a0EU Settlement Scheme<\/a>\u00a0was 30 June 2021, but there are a\u00a0few cases<\/a>\u00a0in which you can apply after the deadline.<\/p>

What is income tax?<\/strong><\/p>

Income tax<\/a> is the\u00a0tax you have to pay the government based on your yearly income. Most income is subject to income tax, including income from employment, self-employment, private and state pensions, investments and property rental. Income from certain savings products, and many state benefits, are not subject to income tax.<\/p>

If you\u2019re self-employed, you\u2019ll pay taxes on any profit you make. This includes income from products and services that you sell online.\u00a0You do not have to pay tax on all types of income.<\/p>

Who pays income tax?<\/strong><\/p>

Income tax\u00a0applies to most types of income, including the salary you earn from your job, profit earned from your business, pensions, and even the rent you receive if you\u2019re a landlord. Corporations, estates, and other types of entities are also required to pay tax on their profits.\u00a0<\/p>

You might not have to pay income tax on all your income, because most people qualify for one or more types of tax-free allowances or tax relief. An allowance is the amount of taxable income you can earn\u00a0before paying income tax.\u00a0<\/p>

Tax in the UK<\/strong><\/p>

Before you can pay taxes in the UK, you need a\u00a0National Insurance number<\/a>. Furthermore, you may also need to apply for a\u00a0Skilled Worker visa<\/a>\u00a0(formerly Tier 2 visa). Now that the UK has left the EU, this also applies to citizens of the European Economic Area (EEA). The deadline to apply for the free\u00a0EU Settlement Scheme<\/a>\u00a0was 30 June 2021, but there are a\u00a0few cases<\/a>\u00a0in which you can apply after the deadline.<\/p>

Income tax rates in the UK<\/p>

The following table shows the income tax rates in the UK, which are based on how much you earn in the tax year 6 April 2022 to 5 April 2023.<\/p>

Income tax band<\/strong><\/p><\/td>

Taxable income<\/strong><\/p><\/td>

Tax rate<\/strong><\/p><\/td><\/tr><\/thead>

Personal allowance<\/p><\/td>

\u00a30 – \u00a312,570<\/p><\/td>

0% – No income tax payable<\/p><\/td><\/tr>

Basic rate<\/p><\/td>

\u00a312,571 – \u00a350,270<\/p><\/td>

20%<\/p><\/td><\/tr>

Higher rate<\/p><\/td>

\u00a350,271 – \u00a3150,000<\/p><\/td>

40%<\/p><\/td><\/tr>

Additional rate<\/p><\/td>

Over \u00a3150,000<\/p><\/td>

45%<\/p><\/td><\/tr><\/tbody><\/table>

What are tax-free state benefits?<\/strong><\/p>

Tax-free state benefits are benefits that you can earn\u00a0without having to pay income tax. Most common state benefits you do not have to pay Income Tax on are:<\/p>