As with most countries, there are many kinds of taxes in the United Kingdom, which is made up of the individual countries of England, Scotland, Wales and Northern Ireland. Citizens of these countries are responsible for national taxes through Her Majesty's Revenue and Customs agency, like income tax and value added tax. UK citizens may also be responsible for local government taxes.
Other People Are Reading
Income and National Insurance
According to the HM Revenue and Customs Beginner's Guide to Tax, citizens in the UK are obligated to pay income tax on all payroll earnings, if employed, and profits from any personal businesses, if self-employed. Retired persons are required to pay income tax on state-funded pensions and/or pensions from private sources or former employers. Additionally, people who receive benefits such as Carer's Allowance, Incapacity Benefit and Jobseeker's Allowance may also be responsible for paying income tax on their earnings.
HM Revenue and Customs also notes UK citizens must make National Insurance Contributions. People who work for companies typically have the NICs automatically deducted from their paychecks throught the Pay As You Earn program. Self-employed individuals are responsible for arranging NICs independently.
Savings and Investments
HM Revenue and Customs reports UK citizens are obligated to pay income tax on profits from savings and investments, such as dividends from stock shares, income from rental properties and interest earned from bank and building society accounts; the guide notes bank and building society profits are typically "taxed at source," which means the taxes are deducted prior to the dividend being paid to the recipient.
Individuals are responsible for capital gains taxes when they sell or donate personal assets. When one buys property or shares of a property, Stamp Duty taxes may be owed. And when a person dies, his estate owes Inheritance Tax, which may include gifts made up to seven years prior to death.
VAT and Other Duties
VAT is similar to what is known as sales tax in the United States. In the UK, people must pay VAT for goods and services they purchase. Clothing, grocery items, furniture and electronics are a few examples of items subject to VAT.
In the UK, people must also pay duties, or taxes, on other purchases. Examples include the fuel duty when purchasing gas, excise duties for purchase of tobacco products and alcohol, and a general betting duty that must be paid when wagering on sports, like horse racing.
HM Revenue and Customs also notes UK residents may be responsible for Council Tax to pay for local services, including trash collection and the police. Council Tax is based on local rates and the assessed residential value of property.
- 20 of the funniest online reviews ever
- 14 Biggest lies people tell in online dating sites
- Hilarious things Google thinks you're trying to search for