Also, everyone, including students, is entitled to a variable amount called Personal Allowance, which represents the amount of funds you can earn each fiscal year before paying income tax. This value can change depending on your personal situation. The amount of personal allowance you’ll receive is set by the government and may change from one fiscal year to another. Another really important thing you should know about the UK tax system, is that some fixed dates have been set for you to pay your taxes. UK tax year dates are in fact based on the tax year, which runs from 6 April to 5 April. If you recently moved to the United Kingdom and you are not sure about the income tax to pay, keep on reading. In the following paragraph’s we’ll go deeper into this matter to help you figure out how much you have to pay and what kind of personal allowance you are entitled to.
Do I Have To Pay The Income Tax?
As previously mentioned, in the UK tax system, income tax is charged on most types of income, such as wages and salaries from work. It also charged on profits (for instance if you run a business), pensions, rents (if you are an owner) and interest and dividends from all kind of investments and savings. Income tax is collected by the HMRC on behalf of the government and it has the purpose to help provide funding for public services. However, in some cases you won’t have to pay income tax on every taxable earning depending on whether you are entitled to an allowance or not. An allowance is an amount of income that you can have tax-free every tax year. Let’s have a closer look at this matter.
What is the Personal Allowance?
As previously mentioned, even though you have to pay income tax depending on your taxable salary earned during the tax year, you are also entitled to a personal allowance, which consists of a variable amount which is deducted from your salary or earnings before you start paying your taxes. In the United Kingdom, everyone is entitled to a personal allowance, even students. There are some special cases where the personal allowance can be higher than normal: you may get a higher amount if you request marriage allowance or, for instance, blindness allowance. The amount of personal benefit you are entitled to is set by the government and may change depending on the tax year and on your job situation. The standard personal allowance is currently set at £12,500. Things will be a little different for people who earn over £100,000, the £12,500 amount is reduced by £1 for every £2 earned.
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