Income Tax.
• Not all income is taxable: your
personal allowance provides an
amount of tax-free income each
year.
• For the tax year 2023/24, the basic
personal allowance (tax-free
amount) is £12,570. Your taxable
income is the amount you earn over
and above your personal allowance.
• You have to pay income tax on that
taxable income.
Did you Know?
• Income tax first introduced in 1799 to raise
money to fight Napoleon….
Did you Know?
• The Income tax year runs from 6 April to 5
April of each year…..
PAYE (PAY AS YOU EARN)
• If you're an employee, your employer deducts Income Tax from
your wages throughout the year, using the tax code provided.
• If your circumstances change, you may be given a new tax code.
• HMRC will send you a PAYE
Coding Notice to tell you:
• what your new tax code is
• the amount of tax-free
income you can receive
(your personal allowance, or
PA)
• how that has been worked
out
Did you Know?
• Income tax is a “temporary” tax. It expires
each year on 5 April
• Parliament has to
reapply it each
year by passing an
Annual Finance
Act.
PAYE (PAY AS YOU EARN)
• Pay As You Earn (PAYE) is a system of deducting the tax that an
employee owes directly from their wage or salary.
• Your payslip shows how much PAYE has been deducted. Your
employer pays that amount to HM Revenue & Customs on your
behalf.
• Your payslip shows
how much PAYE has
been deducted. Your
employer pays that
amount to HM
Revenue & Customs on
your behalf.
TAX RATES
National Insurance
You pay National Insurance contributions to build up
your entitlement to certain state benefits, including
the State Pension.
The exact amount you pay depends on:
• how much you earn
• whether you’re employed or self-employed
Self assessment.
If you have more complicated tax affairs you may need to complete a tax return for HMRC.
In certain circumstances you will always need to complete a tax return.
These include if:
• you are self employed
• you are a company director
• you are a trustee or personal representative
• you have foreign income
A tax return is a form where you record taxable
income from employment, property, foreign
income, interest on savings and dividends and
so on.
You can fill it in online or send a paper tax
return.
The deadlines are different: 31 October for
paper returns and 31 January for online
returns.
Did you Know?
• The deadline for sending in your return is important.
If you miss it there is a £100 penalty charge….
