My name’s Marcus. I work for a bank. I am on PAYE (Pay As You Earn). This means that tax is automatically deduced from my salary. My salary is not particularly high, so I only pay tax at the basic rate. My personal allowance is f5000 a year. Then I pay 10% on the next f2500 and 22% on everything above that. I also have to pay National Insurance, of course, which is another 9%. My gross pay is about f19000 but my take-home is around f15000.
My name is Yvonne. I am a self-employed dentist. Every year I have to fill in a tax return. Dentist can earn quite a lot of money, and my income is usually gone into the higher rate. In other words, I have to pay 40% on everything I earn over f45000 a year. However, the salary I pay my receptionist, the rent for my surgery and the cost of my equipment are all tax deductible. Only about half my turnover counts as taxable income. The National Insurance rules are quite complicated for self-employed people, but my account takes care of that for me.
1. Is a tax payer * *
2. Works for himself-herself
3. Has tax deducted at source
4. Submits an annual tax return
5. Income exceeds the personal allowance
6. Income exceeds the 10% band
7. Income exceeds the 22% band
8. Pays tax at the higher rate
9. Net earnings are below f4000 lower than gross earnings
10. Gross earnings are below the National Insurance threshold
11. Pays National Insurance
12. Has Tax-allowable expenses
13. Employs an accountant
14. Lives entirely on unearned income
1. Income tax
c. Tax on earnings, profits from investments and any other
2. Capital gains tax
a. Tax on profits made by selling
3. Value Added Tax(VAT)
4. Stamp duty
a. Tax on profits made by selling assets such as business, rented houses and shares.
5. Wealth duty
f. Tax on assets (such as houses) payable in some countries, but not in the UK.
6. Inheritance tax
g. Tax on the assets of a person who has died. Used to be called “death duties”
7. Corporation tax
e. In the UK, this is the name for the tax paid by companies
1. tax relief
2. tax break
3. tax exile
4. direct taxation
5. indirect taxation
6. tax avoidance
7. tax evasion
8. tax free
1. Alan’s company is registered in his wife’s name for tax reasons/motives.
2. Until last year, some companies paid part of their executives’ salaries in valuable antiques, to save tax. However, the government has now closed this wormhole/ loophole.
3. In the UK, food and children’s clothes are free /exempt from VAT.
4. Only about 4% of the population are in the highest tax bracket/level.
5. Any company which relocates to Whales will pay not tax for the first two years. This tax incentive/gift is designed to help reduce unemployment in the region.
6. Last year I paid too much tax, so this year I received a tax refund/rebate.