Personal Income Tax Accountants
Understanding how Income Tax works can seem confusing, particularly when you’re first starting out in the workplace. Knowing how Income Tax and Personal Allowance work will allow you to figure out if you’re being paid the right amount and help you budget.
What is Income Tax?
Income tax is a type of tax that UK taxpayers pay to the government based on their earnings. You are taxed not only on your personal income but also on other sources of income such as dividends and interest from savings over a certain amount. If you’re self-employed, you’ll pay taxes on any profit you make including income from products and services that you sell online. Hysons, Chartered Accountants can provide help in calculating the tax owed and advice on the best planning options available to keep you on top of your income tax.
How is Income Tax Calculated?
Income tax is divided into various bands. Your income tax will be calculated based on your tax bracket. The more you earn, the higher your tax band, which means you'll pay more in income tax. Income tax bands are intended to make taxation as equitable as possible for everyone so that those who earn the most contribute the most.
What are the Tax-Free State Benefits?
Tax-free state benefits are benefits that you can earn without having to pay income tax. The following are the most common state benefits.
- Attendance allowance
- Bereavement support payment
- Child benefit
- Child tax credits
- Income-related employment and support allowance
- Industrial injuries benefit
- Lump-sum bereavement payments
- Maternity allowance
- Pension credit
- Personal independence payment
- Severe disablement allowance
- Universal credit
- War widow’s pension
- Winter fuel payments and Christmas bonus
- Working tax credit
- Disability living allowance
- Guardian’s allowance
- Housing benefit
- Income support
Other state benefits, such as jobseeker’s allowance and your state pension, are taxable, so they should be included if you have to complete a self-assessment tax return.
How Hysons can help
At Hysons, Chartered Accounts, all our tax accountants are fully certified, ensuring we provide expert advice to help reduce your tax liability as much as possible and keep you on the right side of HMRC. Talk to our team of expert accounting consultants in Hampshire to see how Hysons can help your business.
Related
Inheritance Tax & Trusts
We can help ensure that you establish the appropriate structures to safeguard and pass down your wealth to future generations.
Self Assessment Accountants
Our self-assessment service for individuals aims to guarantee that your tax return is completed in a timely and efficient manner, while also paying the correct amount of tax.