Income tax

Income tax is payable on taxable income, such as earnings, pensions, investment and rental income. Individuals pay income tax each year, net of personal allowances and other reliefs they may be entitled to. The tax is payable at various rates depending upon your level of income.

Employees pay tax via the Pay As You Earn system before they receive their salary. Tax on benefits in kind is collected via a restriction to the notice of coding.

The self-employed generally make payments on account of their tax liabilities on 31 January and 31st July each year. Any balancing payment becomes due on 31 January following the year of assessment.

Some forms of income are exempt from income tax, for example, National Savings Certificate interest, interest on ISAs, income from Premium bonds and student grants/scholarships.