Week 2

Cards (29)

  • What HMRC stands for?
    . His Majesty Revenue and Customs
  • If somebody is employed can he/she also be self-employed?
    Yes
  • Tax year in the UK runs?
    April 6th-April 5th
  • § Employment income - it is your salary/wages
  • § Trading income from self- employment – you must be registered as self-employed
  • Interest/savings income – if you are receiving interest from your savings, but not an ISA (individual Savings Account
  • § Dividend income - if you are a Director in a limited company or invested in the Stock Exchange and receiving dividends
  • § Property income – if you rent out a house or flat
  • § Most UK residents pay tax at source through their employment under a contract of employment
  • Most income is received gross whilst some incomes are received net
  • § Property income, trading income are usually received gross
  • P60
    § Summary of: income received, tax taken at source and National Insurance Contributions collected.
  • P60
    § Given to an employee by an employer at the end of every Tax year.
  • P60
    If an individual has other income and must file tax return by themselves
  • P45
    § Summary of: income received, tax taken at source and National Insurance Contributions collected.
  • P45
    § Given to an employee by an employer when the employee leaves the employment.
  • P45
    § to give it to the new employer so they know what tax code should they apply and how much tax was already paid from the beginning of the current tax year
  • Self-employed taxpayers do not pay tax at source
  • self employed SELF ASSESS their taxation and  pay it to HMRC in instalments or once per year (it depends on the amount)
  • Personal allowance for EVERY TAXPAYER:
              £12,570 
    § This is the amount which everybody can earn without paying taxes on it.
    The salary/profit is reduced by this amount and tax is paid on the remaining amount
  • if someone’s total income (all sources combined) is above £100,000 then: Personal allowance is reduced by £1 for every £2.
  • How much would you need to earn in order to lose the PA altogether?
    £125,140
  • Gift Aid means charities and Community Amateur Sports Clubs (CASCs) get an extra 25p (from HMRC) for every £1 donated.
  • If you pay higher rate tax, you can also claim the difference between the higher rate of tax (40%) and the basic rate (20%) on the total (gross) value of your donation. It means simply that your 20% basic tax band is extended by grossed amount of the gift-aid.
  • Income is taxable on the basis of which CLASS it falls within
  • Each individual has their own set of allowances
  • Income from all sources is grossed up
  • Income tax rates are progressive from 0% to 45%
  • Higher rate taxpayers will get relief for gift aid payments by extension of the basic rate band.