For most people in the United Kingdom there isn’t really one — thanks to the Pay As You Earn (PAYE) system.
The vast majority of Britons who arrive on this page should take a deep breath, and thank their lucky stars that the HRMC created such a lazy person’s dream system as PAYE — short for Pay As You Earn. They’ll take just the taxes that they need to fund all the things you love about this great country — and probably a few stray things you’re not particularly keen to fund but such is life.
A few of you — well, actually about 10 million of you — won’t be so lucky and will have to deal with the minor unpleasantness of submitting the six page self-assessment tax return. There are a few key dates you’ll need to keep in mind to stay on the HRMC’s good side. If you intend to file a paper return, you’ll need to submit it midnight on 31 October 2019.
Those who choose to file taxes online have until the deadline for paying any of the previous year’s taxes you owe. The HRMC’s so eager to get your money, they’ll take just about any form of payment — credit or debit card online, you can schedule a direct debit or even pay in person at your bank. Should you send a cheque by post, be sure to allow three working days for your payment to arrive. So who makes up this inconvenienced class of taxpayers? Though it’s possible you’re a “name” at Lloyd’s of London, or a religious minister, it’s much more likely you’ll be filing because you’re self-employed or a partner or director of limited company. If you earn over £100,000 annually, or bring in pre-tax investment income of £10,000 or more, you’ll also need to file.
Some good news. You can reduce your current tax bill before the tax deadline. That’s because when you start a pension (and contribute to it), that money is deducted from your income tax. In other words, your current tax bill is lowered (lucky you!) Of course, you’ll still have to pay tax on that income when you retire. However, there’s one major advantage — when you retire your tax rate will likely be lower than it is now, as you’ll probably be earning less income.
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