Taxes on various forms of employment UK loans
It is said that in this world two things are certain: death and taxes. Both are equally unpleasant, but this time we will write about the latter, i.e. about taxes in the UK. What does the Tax Office require from us? When do we have to settle accounts with him and finally how much is deducted from our salary?
Taxes are a rather unpleasant element of the UK economy. It is natural that we do not like to part even with some of our hard-earned money. Let us remember, however, that no modern country could function without taxes.
In fact, not only modern
It is thanks to them that we have roads, hospitals, schools, benefits and much more. Of course, there are those who postulate their liquidation, but this is not expected. It is hard to imagine private lanterns on the streets or benches in the park for coins.
Therefore, we will present what taxes in the UK you have to pay, depending on the form of employment. What is more profitable? Standard employment contract or self-employment? What can we deduct?
Tax in the UK with an employment contract
If you are employed on a standard employment contract, the situation is basically simple. You don’t have to do anything. It is your employer who pays contributions for you in the PAYE (Pay As You Earn) system. He deducts them from every payment you make. You only have to take care of the settlement yourself if you have an additional source of income. Then you have to submit an appropriate Self Assessment to the Tax Office.
It is different if you are in Self-Employed. Then, according to British law, you are an entrepreneur, you have your own business and the employer becomes your client. In this case, you must settle yourself and pay all contributions yourself. It is also necessary to submit a declaration with the settlement of the previous year.
The tax year in the UK looks different than in Poland. Well, it lasts from April 6 to April 5 the following year. And it is from this period that you should account for. You must submit the tax declaration by October 31 on paper or by January 31 if you intend to send an e-declaration electronically.
Report to the Tax Office
If you are a self-employed person, you should immediately report this fact to the British equivalent of the Tax Office, i.e.MM Revenue & Customs. You also need to keep an eye on your turnover. If they exceed 83,000 pounds in the last 12 months, you also have to inform HMRC and register as a VAT payer. And this is not about the last tax year, but a year back at any time. So much for duty.
However, you also have some privileges. As an entrepreneur, you can write off the costs of your business. And it can be both a fuel fee, a public transport ticket, a phone bill, and an industry press. You are not required to attach proof of payment or bills to your tax settlement. However, you should keep them for several years and be ready to show them in case of control.