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Taxation in the UK


Just a few words of introduction about UK personal taxation. We are not tax lawyers and for more detail about UK taxation we strongly recommend that you contact a good accountant or have lots of fun reading http://www.inlandrevenue.gov.uk/ and especially www.inlandrevenue.gov.uk/international/

The government body dealing with tax in the UK is called HM Revenue and Customs (until recently called the Inland Revenue)


National Insurance (NI)

NI entitles you to benefits such as Incapacity Benefits and Retirement Pension. There are no National Identity numbers in the UK so in order to track your benefits and pension rights the social security office requires you to have a NI number(NINO). Obtaining an NI number can be done in either of two ways.

1. We can assist you by obtaining the necessary forms, communicating with both you and the Department of Works and Pensions, supply you with various helpful guidance notes to ensure your forms are filled out correctly and lastly we apply for the NI number on your behalf.

OR

2. You need to personally visit a local office of the Department of Work and Pensions (DWP), produce proof of identity and fill out the application forms.

For more details about NI look at www.inlandrevenue.gov.uk/nic/ynino.htm.

National Insurance contributions are deducted from your pay as follows:

NI is deducted in different earning bands. For April 2007/March 2008 these are:


£0-£100/week NI is 0%.

£100-£670/week NI is 11% in this band.

> £670/week NI is 1% in this band.

For the latest changes please see www.hmrc.gov.uk/rates/nic.htm


Income tax

The income tax year in the UK starts on the 6th of April and ends on the 5th of April each year.
The first time you work in the UK Scanloc will send you form P46 and P85 these contain information which is necessary in order that we can deduct the correct amount of income tax.
At the end of each employment your employer will send you a statement of your income so far this tax year, this is called a P45 form. When you start at your next employer you hand the P45 over to them so that they know how much you have earned this year and can deduct tax appropriately.
For the first £2230 above the personal allowance income tax is deducted at 10%. From £2231 to £34600 at 22%, and over £34600 at 40%. The personal allowance is at present £5225.

Approximately six weeks after the end of the tax year Scanloc will send you a statement of earnings, income tax and NI deductions, called a P60. You should keep this form as a permanent record.

Your income tax on each pay slip will be calculated using your income so far this tax year as a basis for predicting your income for the whole tax year. This may mean that some people working only part of the tax year you will be deducted too much tax based on their end of tax year income. You can claim this tax back from the Inland Revenue at the end of the tax year.


A Tax Return or Notice to Complete a Tax Return (SA316) may be sent to you by the Inland Revenue at the end of the tax year. If you do not receive a form and wish to make a tax claim fill in a tax return form at www.inlandrevenue.gov.uk/sa/forms/content.htm

You may be asked for Scanloc’s Tax District reference, this is 334/SS440.


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