Tax & NI in the UK
The UK tax year runs from 6th April – 5th April. For those working in the UK for the first time and planning to work through the PAYE (Pay as You Earn) income taxation scheme you will need to complete a P46 form.If you have worked in the UK before, you will need to provide our Payroll division with your P45 issued from your previous employer. If you do not have this, you will need to complete a P46. The P45 form provides us with information on your previous earnings, tax paid and tax code. We recommend that you keep copies of your P45’s (leaving certificates) and P60’s (end of year tax certificates) in a safe place as you will need these to complete your annual tax return and / or final UK tax return.
Income tax rates 2006-2007 by tax band and type of income
| Income tax band |
Income tax rate on earned income (see note) |
Income tax rate on savings |
Income tax rate on dividends |
| Starting rate: £1 to £2,150 |
10% |
10% |
10% |
| Basic rate: £2,151 to £33,300 |
22% |
20% |
10% |
| Higher rate: £33,301 and above |
40% |
40% |
32.5% |
Further info can be obtained at http://www.hmrc.gov.uk/rates/it.htm
Or for general information on tax please visit the Inland Revenue website on www.inlandrevenue.gov.uk
Tax Diary June 2007
19 June 2007 - PAYE and NIC deductions due for month ending 5 June 2007. (If you pay your tax electronically, the due date is 22 June 2007)
19 June 2007 - Filing deadline for the CIS300 monthly return for the month ending 5 June 2007.
19 June 2007 - CIS tax deducted for the month ending 5 June 2007 is payable by today.
National Insurance (NI)
If you work under the PAYE scheme your employer automatically deducts Income Tax and employee’s National Insurance contributions due from your gross pay. They will then pay the net amount directly into your account. As well as these deductions your employer will also incur a further cost to themselves of 12.8% of your gross salary to the Inland Revenue for employer’s National Insurance.
If you decide to work through a limited company it becomes the responsibility of that company to ensure that any Income Tax or National Insurance due is paid.
In order to work through the PAYE scheme you will need a National Insurance number. By law you must apply for an NI number as soon as you start working although you may be able to apply beforehand, depending on how busy your local DSS office is at the time.
Applying for a NI number
To apply for a NI number you will need to carry out the following:
Find out where your nearest DSS (Department of Social Security) is located by telephoning +44 (0) 845 600 0643 between 8.00am and 6.00pm, Monday to Friday Make an appointment with a local DSS office for a one-to-one confidential interview Don’t forget to take with you: Your passport Proof of UK address – Use your UK bank statement if you do not have a utility bill in your name Letters of appointment contract or pay slip confirming employment or letter outlining that you are seeking employment. For the latter, if you are registered with Martin Ward Anderson we can provide you with a letter of registration as proof that you are actively seeking work.
Remember - a National Insurance number is not proof of identity
There is more detailed information about National Insurance numbers on the HM Revenue & Customs website www.hmrc.gov.uk