In general, a British citizen pays between 20 and 45% of taxes. If you live and work in the United Kingdom, whether you are expatriate or British, you will most certainly have to pay Self Assessment Tax. This is where the professional accounting services and tax return advisor services in Watford can help you. Here are the essential points to know about the taxation in force on the British territory.
In the United Kingdom, the income tax is deducted at source, directly from your employer, and the short tax year from April 6th N to April 5th N + 1.
First of all, it is necessary to have a National Insurance Number that allows you to pay your Tax and to contribute for retirement.
In the United Kingdom, there are 3 types of residence taken into account. It is important to be able to locate you to know the tax return system that applies to your case.
It is your employer who transmits your information to the public administration for the attribution of your tax code (Tax code).
Many of our readers ask us, “how to find accountants near me?” If you are looking for a tax accountant in Watford, our tax accountant will individually look into your case and assist you with your needs.
The 3 types of residence:
- Ordinary residence
- The simple residence
Your tax return situation is studied according to these 3 cases.
1 – You are an ordinary resident if: on your arrival in the United Kingdom you intend to stay there for at least 3 years or if you live effectively for at least 4 years
2 – You are a single resident if: you have resided in Great Britain for at least 6 months between April 6 and April 5 of the following year, or 91 days during the last 4 years, or at least 2 years as part of a job.
3 – You are domiciled if: your place of residence in the United Kingdom is considered as your permanent place of residence.
On the other hand, if you are not domiciled in Great Britain but you are a single/ordinary resident and you have a professional activity both in the United Kingdom and abroad, you will be exempt from the tax on income as long as these earnings are not transferred to the United Kingdom.
Visit the official UK tax website for more information: gov.uk
In the United Kingdom, taxes are calculated for each person. This is because they are deducted at source i.e. they are deducted directly from the salary with the taking into account of the deductions which you could be the beneficiary – itis the PAYE (Pay as You Earn) system.
As a result, the employer who calculates the income tax and deducts it from wages before they are paid.
Some deductions are made for certain family situations such as marriage, PACS or if you were born before 1935. Other deductions are also possible as charitable donations or business expenses. Are you self-employed in the UK and looking for help? Inquire about your Tax return with fair View Accountants, the best Tax Advisor in Watford!
To get an idea, here is the scale that currently applies depending on the amount of annual revenue:
- 0% for annual income up to £ 11,500
- 20% for annual income between £ 11,501 and £ 45,000
- 40% for annual income between £ 45,001 and £ 150,000
- 45% for annual income over £ 150,000
Be careful: note that if you live in Scotland the scale is different.
You can easily check the amount of your tax return on Tax checker or UK Tax Calculators. If you need help, you may reach out to us at Fair View Accountants.
Nevertheless, not all income is taxable. Taxable income includes:
- Dividends received (shares, stock market investments)
- Savings products
- Rental income (for the property you own)
- Revenues from a private company
Non-taxable income is:
- The Working Tax Credit (WTC which corresponds to the tax credit)
- Allowances (this depends on the type of allowance received)
- Account interests
Tips to comply with the tax return
Here are some important tips for you if you are self-employed in the UK.
1.- Identify the declarations to present
Every good taxpayer must keep in mind the taxes with which he must comply – if you still do not know or you already forgot what they are and in what period of the declaration they should be made
2.- Program your activities:
We ensure that you don’t face any problems while making the payment and declaration of your taxes, so we suggest you schedule activities to do them before the date established and manage to comply with the tax return declaration on time.
Create your calendar so that you distribute the collection of invoices and the calculation of taxes to declare between 17 days of each month.
Recall that the declarations must be submitted within the first 17 days of the month following the one to be declared i.e. the month of February is declared in March.
3.- Collect and order your invoices:
To calculate your taxes you will need invoices, right? Start by collecting all the invoices that you processed throughout the month to start the tax return calculation.
4.- Secure the resources to use
To declare your taxes without mishap, I recommend that you define the resources you will use in advance, from a good billing system to the accounting office, accounting service or independent accountant who will be in charge of this task.
5.- Perform the tax return calculation.
Once you have the invoices that are exclusively deductible according to the activity you perform, you must perform the tax calculation.
The tax return can be a complicated task when you have no idea how to do it; however, you can hire an accounting service or tax return advisor service to help you calculate your taxes.
How to find accountants near me?
It can be difficult to find an accountant in Watford just by searching “accountants near me”. You need to look at their business practices to ensure they cater to your needs and pay special attention.