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Background
Income Tax, as the name suggests, is a tax on income. Income includes not only earnings from employment and business profits, but unearned income such as bank interest and share dividends.
Everyone resident in the UK is subject to UK income tax as well as some people resident overseas with UK income. Some people are required to complete a Self Assessment tax return, and if refunds are normally due, a Tax Repayment claim may be made.
Rates of tax
Rates of income tax will depend on the level of the taxpayers income, and the type of income being taxed. Rates are:-
Dividends 10 / 32 ½ %
Interest 10 / 20 / 40%
Other earnings/income 10 / 22 / 40%
More rates and allowances
If you do not complete your Self Assessment before 30 September, you will have to do the calculations yourself (unless filing the return over the internet). The tax calculation is currently 34 pages long !
Those most likely to need to complete a Tax Return are:-
• self-employed
• letting a property
• in receipt of untaxed interest/income
• higher rate taxpayers
• individuals not using all of their allowances
• pensioners with income above £19,500
• employees with benefits in kind
• those with capital gains (see page 2)
North Norfolk Taxation Service offers a free initial meeting to make sure that you are claiming all of the allowances you are due and to determine whether there are any other planning opportunities available.
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