UK Tax: An Overview
The UK tax system is an important part of the country’s economy. It’s not only important for ensuring the government has the necessary funds to provide public services, but it also helps to create a fairer society. This article will provide an overview of the UK tax system, including who pays taxes, what types of taxes are paid, and how the system works.
Income Tax: Who Pays and How Much?
Income tax is the most common type of tax paid in the UK. It is paid by individuals, companies, and other organisations on their income. The amount of income tax paid depends on the taxpayer’s income, with higher earners paying more. The current rate of income tax in the UK is 20% on earnings up to £50,000, and 40% on earnings over that amount.
Value Added Tax: What Is It?
Value Added Tax (VAT) is a tax on goods and services. It is charged at a rate of 20% on most goods and services, though there are some exceptions. VAT is collected by businesses and then passed on to the government. It is used to help fund public services, such as healthcare and education.
Corporation Tax: Who Pays It?
Corporation tax is a tax paid by companies on their profits. The current rate of corporation tax in the UK is 19%. Companies must pay corporation tax on their profits, regardless of where the profits were earned.
Inheritance Tax: What Is It?
Inheritance tax is a tax on the estate of someone who has passed away. It is charged at 40% on the value of the estate over £325,000. Inheritance tax is paid by the executor of the estate and is used to help fund public services.
Council Tax: Who Pays It?
Council tax is a tax paid by households to their local council. It is used to fund local services, such as rubbish collection, road maintenance, and social care. The amount of council tax paid depends on the value of the property and the number of people living in the household.
Stamp Duty: What Is It?
Stamp duty is a tax paid on the purchase of property or land. It is charged at different rates depending on the value of the property or land being purchased. Stamp duty is paid by the buyer of the property or land and is used to help fund public services.