Dedicated to Working Holidaymakers and people willing to immigrate

Thursday, 7 May 2009

How much tax do I need to pay if I work in the UK?

If you are going to be living and working in the UK you will usually have to pay tax here as well.

How much income tax will I have to pay?

The amount of income tax you have to pay depends on how much you earn.

For the tax year 2007/2008 the first ₤5,225 that you earn is tax free (personal allowance), and after that you must pay tax at different levels:

10% on the next ₤2,230
22% on the amount from ₤2,231 to ₤34,600
40% on anything above ₤34,600

What are national insurance contributions?
You pay national insurance contributions (NIC) to build up your right to social security, benefits and a pension. NIC are automatically deducted from your wages or will be calculated from your self assessment tax return. For more information about National Insurance visit Directgov or our pages on Social Security and Benefits.
What is a tax year?
The tax year runs from 6 April to 5 April. If you come to settle in the UK in the middle of a tax year you will often only have to pay tax on income from the moment that you arrive, but there are exceptions to this. Find out more at the Direct Gov website.

How do I pay income tax?
If you are employed, income tax and national insurance contributions will be automatically deducted from your salary (Pay As You Earn: PAYE), and you will not normally need to fill in a tax return each year. If you are self-employed, or have a substantial income from property or other means (for example foreign income), you will need to fill out a self assessment tax form. When you inform HM Revenue and Customs of your circumstances, they should determine whether you need to fill in a self assessment form, and will give you guidelines on how to do this.

You also can use this tools to calculate your tax (

Extracted from ListenToTaxMan
*Information is extracted from other web site for self reference only. We are not responsible for any material posted. You can file a complaint here.

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