Introduction to UK Tax System Flashcards
(16 cards)
When is a Self Assessment tax return submitted on paper due?
31 October, the following tax year relating to which the return relates to.
When is a Self Assessment tax return submitted electronically due?
31 January, the following tax year relating to which the return relates to.
What are the due dates of payment in relation to a self-assessment?
- First Payment on Account: 31 January in the tax year
- Second Payment on Account: 31 July, the following tax year
- Balancing Payment: 31 January, the following tax year
When should a notification of chargeability be made?
Within 6 months of the end of the tax year end.
How long should a taxpayer who is in business or who lets property keep records for?
5 years after 31 January, the following tax year.
Otherwise, how long should a normal taxpayer keep records for?
1 year after 31 January, the following tax year.
What is the time period for an appeal against HMRC?
Within 30 days.
If the taxpayer and HMRC are unable to agree, what can the taxpayer appeal to?
A tribunal.
What income is totally exempt from income tax?
- Income from ISAs
- Income from National Savings Certificates
- Certain minor benefits provided to employees
- Certain lump sums from pension schemes
- “rent-a-room” income
- Premium Bond prizes and betting winnings
- Some social security benefits
- Trading & property income of up to £1,000 per annum
What are the tax rate bands?
- Basic rate tax on first £37,000 at 20%
- Higher rate tax on next £112,300 at 40%
- Additional rate tax after £150,000 in total at 45%
What are the Scottish tax rate bands?
- First taxable £2,162 at 19%
- The next £10,956 at 20%
- The next £17,974 at 21%
- The next £118,908 at 41%
- Remainder above £150,000 AT 46%
These rates apply only to non-savings income. Savings & dividends income is taxed in the same was UK taxpayers.
How is savings income taxed?
- If the first £5,000 of taxable income is savings income then it is taxed at 0%.
- Tax bands are allocated first to non-savings income and then to savings income.
What is the personal savings allowance?
£1,000 unless:
- taxable income exceeds £37,700, in which case PSA is £500
- taxable income exceeds £150,000, in which case PSA is £0
Savings income within PSA is always taxed at 0% regardless of what tax band it falls into.
Is the PSA used against savings income that falls within the first £5,000 of taxable income?
No. Both can be used if applicable.
What is the dividends allowance?
£2,000 at 0% with no exception.
What are the tax rate bands for dividends income?
- Ordinary rate: 8.75%
- Upper rate: 33.75%
- Additional rate: 39.35%
