If your income is over a certain amount, you will have to pay Income Tax on it. Not all income is taxable, and there are allowances and reliefs you may be able to claim.
What do I have to pay income tax on?
Not all income counts towards Income Tax. You may have to pay tax on:
- earnings from employment or self-employment
- pensions, including State Pension, and annuities (except pensions under the War Pensions Scheme and Armed Forces Compensation Scheme)
- interest from savings accounts
- dividends from shares
- income from lettings
- some benefits, such as Carer’s Allowance and Statutory Sick Pay
- income from a trust.
Do I have to pay tax on all my income?
You do not have to pay tax on:
- Pension Credit
- Universal Credit
- Attendance Allowance
- Disability Living Allowance
- Personal Independence Payment
- Winter Fuel Payment
- pensions administered under the War Pensions Scheme and Armed Forces Compensation Scheme
- lottery or Premium Bond wins
- industrial injuries benefits
- Individual Savings Accounts (ISAs)
- some National Savings and Investments products.
How much income tax should I be paying?
We all have a personal tax-free allowance representing the amount of income you can receive before paying tax. This tax-free amount starts to reduce if your income exceeds £100,000. Some people are entitled to other tax-free allowances as well, such as Married Couple’s Allowance and Blind Person’s Allowance.
What should I do next?
Use the HMRC tax calculator
It’s important to check you’re paying the right amount of Income Tax. HMRC's tax calculator can help you check if you’re being incorrectly taxed.
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