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 on April 6th. There are a couple of ways you can be taxed on your earnings depending on your type of UK employment, either PAYE or managed companies.
The UK tax system operates on a sliding scale similar to most Western Countries.
Income Tax Rates and Bonds
| Band | Taxable income | Tax rate |
|---|---|---|
| Personal Allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | over £125,140 | 45% |
Important Note: Income tax bands are different in Scotland. You can see it here
As an employee, you can do the following on the HMRC App:
- Check the income tax you paid in the current year
- View your tax code and personal allowance
- Find out if you paid too much or too little tax
- Track tax code changes
- See your estimated income tax for the current year
Income tax is generally lower in the UK than in 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 15%
… compared to 20% VAT in the UK.
Also, find out about PAYE and managed companies and What you need to do when you arrive: Your NI Number
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