INCOME TAX & NATIONAL INSURANCE

 

If you’re an employee or pensioner and usually pay tax through Pay As You Earn (PAYE), your employer or pension provider will deduct the correct amount of tax on behalf of HM Revenue & Customs (HMRC), and you will not usually be required to complete a tax return. If however you are a higher rate tax payer, your tax affairs are more complicated, or you are a trustee, company director or self-employed, then you will be required to complete an annual tax return. You will also need to do this if you have any foreign income.

 

A paper tax return must be submitted by 31 October following the close of the tax year, or your return can submitted on-line, completing by 31 January, after the close of the tax year. 31 January is also the date by which any outstanding income tax should be paid.

 

To arrive at the correct amount of tax due, your income and capital gains will be assessed, before deducting any tax allowances and reliefs. HMRC uses the figures on your tax return to calculate your tax bill, or your tax advisor or accountant can do this for you.

 

If you are self employed, you are likely to be required to make payments in advance. HMRC use your current tax bill to estimate your tax bill for the following year, 50% of which will be due by 31 January i.e. when you complete the tax return for the year you’re currently calculating.

 

 

National insurance (NI) is normally paid alongside income tax, to HMRC. There are various classes of NI but the most common are:

• Class 1 – paid by employees and employers through the PAYE system

• Class 2 – paid by self employed persons on a weekly basis (currently £2.75 pw)

• Class 4 – paid by self employed persons on profits above £7,956 and up to £41,865 at 9% and 2% over £41,865.

 

If you would like us to help you with you tax return, please

 

For more information from HMRC on income tax, go to

 

For information from HMRC regarding NI go to