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How much tax do I need to pay in the UK?

If you work in the UK for any length of time, you will need to pay tax in the UK. The tax year starts in April 6th. There are a couple of ways you can be taxed on your earnings depending on your type of UK employment, either PAYE and managed companies.

The UK tax system operates on a sliding scale very similar to most Western Countries.

The tax brackets and the amount payable for the current tax year are shown below:

 2009–102010–112011–12
Starting rate for savings: 10%* £0–£2,440 £0–£2,440 £0–£2,560
Basic rate: 20% £0–£37,400 £0–£37,400 £0–£35,000
Higher rate: 40% Over £37,000 £37,401 - £150,000 £35,001 - £150,000
Additional rate: 50% N/A Over £150,000 Over £150,000

Important Note: UK tax returns are not mandatory, so many people miss out on refunds. To find out if you are owed money we recommend using a service that offers free no obligation assessments and the ability to get a Tax Refund if you decide to proceed.

Get a free no obligation Tax Refund assessment >

Notes:

From 2008–09 there is a 10% starting rate for savings income only. If your non-savings income is above this limit then the 10% starting rate for savings will not apply.

From 20010–11 a new 50% tax band was introduced on all incomes above £150,000 a year.

In general, income tax is lower in the UK than many countries including Australia and New Zealand. Consumption taxes tend to even things up, unless of course you save it!

  • Oz GST at 10%
  • NZ GST at 15%
  • SA VAT at 14%

... compared to 20% VAT in the UK.

Also find out about PAYE and managed companies, What you need to do when you arrive: Your NI Number and visit the official websites at www.inlandrevenue.gov.uk and www.dwp.gov.uk.

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