Tax
Types of deductions
If you do not have a Limited Liability Company, there are two types of deductions in the UK that apply to you - PAYE (Pay as you earn) and NI (National Insurance).PAYE. The UK tax year runs from 6 April to 5 April the following year.
There are taxation thresholds in the UK, as follows:
Threshold Income Tax Rate
- Personal Allowance First �4,895 Tax Free
- Lower Rate �0 - �2,090.00 10%
- Basic Rate �2,091 - 32,400.00 22%
- Higher Rate �32,400.01 + 40%
To complete your tax return you must keep: Copies of all your P45's - these are the tax certificates you get when you leave an employer. You may have more than one in a year
- P60 - this is the end of year tax certificate issued by your employer
- All of your payslips
National Insurance
National Insurance provides for unemployment and social security benefits, state pensions and the National Health Service (NHS). You are required by law to obtain a National Insurance number. You can obtain this by contacting the department for Works & Pensions.
In addition to PAYE, National Insurance is automatically deducted from your gross wages. National insurance deductions are based on thresholds:
�0.00 - �94.00 = 0%
�95.01 - �630.00 = 11%
�631.01 - No upper limit = 1%
To get a National Insurance number, you have to register with the Department for Works & Pensions. Call the DWS Public Enquiries Line on 020 7210 5983 to find out where your local office is. We recommend you telephone your local office before you visit to see if it is possible to make an appointment and to find out what documentation you are required to take with you. Usually they require: A letter of confirmation of employment. Your passport DSS offices are notorious for their long queues, so if you cannot make an appointment it is a good idea to go early and take a book! On the day you register, you will be given a temporary number then your permanent number will be posted to you three to four months later. For more information please visit
www.inlandrevenue.gov.uk
DSS telephone number
+44 (0) 20 7210 5983