The word “tax” in the UK and usually everywhere else creates a feeling of problems, dislikes and general discomfort. In the UK it is essential that individuals and businesses adhere to the country’s tax laws. Failing to do this can lead to a heavy financial reprimand or in the most severe cases even imprisonment.
Tax in the UK comes as part and parcel of everyone’s everyday life. The most common form of tax which must be paid by every working person, including self employed people who are earning over a certain amount per year, is income tax. If the person is earning less than the tax threshold amount, no income tax will be charged. The higher amount a person earns per annum is dependant on how much tax they will need to pay, a higher earner will be placed in a higher tax band, therefore they will pay more tax, it is important for legal reasons to declare all earnings which are taxable, including wages, income from renting out accommodation and even interest on a person’s bank account. Other common for of taxes in the UK is Value Added Tax or VAT, it is added to the price of most items we buy in the shops or the supermarket and most business goods which involve a transfer of goods or services. If a business reaches a certain financial point, they will need to register for VAT and charge it on top of any goods or services they sell. Proper VAT records must be kept and sent away quarterly.
It is very important that UK resident comply with the tax laws such as income, VAT, inheritance and council. Most people don’t like them but there is nothing we can do about it except for adhere to the laws if you want to stay out of trouble.
For impartial & independent financial advice contact Source IFA.
Tags: compliance, income, tax
