Even if your professional accountants in Glasgow did not tell you that HMRC Income Tax is trickier and complex to understand, you would know it for certain. In a nutshell, the tax is understood as the tax you need to pay on your income.
However, it must be understood that tax is not paid on all types of incomes. There are clear and descriptive rules that govern the same.
Before anything else, take a look at the incomes where HMRC Income Tax is levied.
- All types of job profits
- Profits that you make by virtue of being self-employed and by providing services through applications or websites
- Dividends paid to you from investments made on company shares
- All incomes from trust retirement funds; including state, personal and company pensions along with all retirement annuities
- Interests paid by pensioner bonds and savings etc.
- Certain state benefits rental earnings (exempt, if you happen to be a live-in landlord and take £4,250 or less).
It must also be understood that the following items are exempted from tax;
- Premium bonds or national Lottery wins
- Reliefs and allowances for HMRC Income Tax
- Incomes derived from tax-excepted accounts in the likes of the Individual Savings Account and National Savings Certificates.
- The first rent of £4,250 that a tenant pays to you when renting
- Certain state benefits
As any of your consultant accountants would inform you, most of the people of the UK have an income or an individual allowance that is exempted from the tax. Upon this allowance or limit, as some accountants in Glasgow would say, each and every type of income is taxable under the regulations established to govern the entire tax affairs.
HMRC Income Tax rates and allowances prevailing as now
The tax you need to pay every year is based on the tax slabs established by the HMRC.
However, the tax is calculated;
- Upon the amount which comes in the scope of each tax slab
- Based on the difference between your income and personal allowance granted
- Based on the incomes that are tax-exempt
HMRC Income Tax-exempt Personal Allowance
Though you are required to pay 20% of your savings as interest, you can claim tax-reliefs as permitted which can get you back a portion of the tax payable. The standard Personal Allowance on which you need not pay tax is £10,600. If your income calculates to be more than £100,000, the personal allowance would naturally be smaller. Additionally, if your incomes are higher, then you are required to pay higher tax percentages.
Since paying HMRC Income Tax is an every year affair, you need to pay more attention to the same than you would like. Failing to pay taxes on time and regularly can become a blotch on your credit rating image. This makes it important to get all the help you need from professionals such as Dedicated accountants in Glasgow or DNS Associates. They have all the required experience, professional exposure and impeccably talented accountants and tax practitioners to help you with whatever accounting jobs that you have for them. With their reliable and trust-worthy track record so far with numerous businesses and companies, they can provide you with the best tax practitioners and accountants, for sure.
Also read about HMRC Inheritance Tax.