Anyone who is physically present in United Kingdom for six months or more is regarded as resident for tax purposes. People who stays in UK less than six months aren’t usually regarded as tax residents and could claim for tax refund. The tax year in the UK starts on the 6th April each year and ends on the 5th April the following year. You will be automatically allocated a Tax Code with the beginning of your employment. If you only have one job or pension the tax code for 2015/2016 is 1060L for 2016/2017 it will be 1100L.
You will pay income tax on the following:
• profits you make if you’re self-employed,
• some state benefits (the State Pension, Jobseeker’s Allowance, Carer’s Allowance, Employment and Support Allowance (contribution based), Incapacity Benefit (from the 29th week you get it), Bereavement Allowance, pensions paid by the Industrial Death Benefit scheme, Widowed Parent’s Allowance, Widow’s pension),
• most pensions,
• rental income,
• benefits you get from your job,
• income from a trust.
You don’t have to pay tax on things like:
• interest on savings under your savings allowance,
• income tax from tax-exempt accounts, Individual Savings Accounts and National Savings Certificates,
• the first £5,000 of dividends from company shares,
• some state benefits (Housing Benefit, Employment and Support Allowance (income related), Income Support - though you may have to pay tax on Income Support if you’re involved in a strike, Working Tax Credit, Child Tax Credit, Disability Living Allowance, Child Benefit, Guardian’s Allowance, Attendance Allowance, Pension Credit, Winter Fuel Payments and Christmas Bonus, free TV licence for over-75s, lump-sum bereavement payments, Maternity Allowance, Industrial Injuries Benefit, Severe Disablement Allowance, Universal Credit, War Widow’s Pension, Young Person’s Bridging Allowance),
• premium bond or National Lotery wins,
• rent you get from a lodger in your house that’s below rent a room limit (From 6 April 2016, this is £7,500).
If you file an annual paper tax return you have to do that by 31 October.
If you file an annual online tax returns you have to do that by 31 January.
If you will be late you have to pay £100.
Income tax is deducted directly from your salary, through the Pay As You Earn (PAYE) scheme. The majority people in UK pay their tax with this system. Your tax contribution is deducted from your gross salary at the end of week, month. Your employer is responsible for sending this deduction to the HMRC. If you are self-employed you have to pay your tax direct to HMRC and this is called Self Assessment. But you have to be registered as self-employed with HMRC to do that.
At the end of the year you will receive a P60 from which shows how much tax you have paid. If your job ends, you will be issued with a P45 to give to your next employer or Jobcentre. If you do not have a P45 when you start work or start your first job in the UK, your employer will give you a P46. If you are going to leave the UK or you already did it you must tell HMRC. If you’re not required to fill in a tax return, you’ll have to complete form P85 “Leaving the UK – getting your tax right.” HMRC will use the information on the form to send you any tax refund you’re owed and work out if you’ll become non-resident. It’s important you enclose parts 2 and 3 of form P45 if you have one, as HMRC will not be able to make any tax refund due without them.
You can earn an amount of income in a tax year without paying income tax. It is called your Tax Allowance. If your income does not exceed your tax allowance then you will not pay income tax. For 2016 to 2017 the basic Personal Allowance will be £11,000 per year. Earnings above this level are taxed according to following rates:
Band Rate Income after allowances 2016 to 2017
Starting rate for savings 10% (0% from 2015 to 2016) Up to £5,000
Basic rate 20% Up to £32,000
Higher rate 40% £32,001 to £150,000
Additional rate 45% Over £150,001
There are different tax rates in Scotland: https://www.gov.uk/scottish-rate-income-tax
If you want to know more about income tax in United Kingdom please visit this website:
If you need to contact with HMRC and you are currently in United Kingdom please call 0300 200 3300, if you are outside UK use this number 044 135 535 9022
8am to 8pm, Monday to Friday
8am to 4pm, Saturday
If you are going to claim your tax refund or you need a help in filling an application you can contact with:
HM Revenue & Customs, PAYE & Self Assessment