Residence affects Income Tax in UK
There is an interesting anomaly that can affect taxpayers with homes in Scotland and other parts of the UK. Where this is the case, the question arises as to whether or not the taxpayer is liable to pay Income Tax in Scotland or elsewhere.
As a general rule, the Scottish rate of Income Tax (SRIT)
Tax by stealth
There is a plausible link between a rise in tax payments if tax rates increase or if tax allowances and reliefs fall. But what happens if there is no change in tax rates or allowances?
In this case, there would be an assumption that taxes would not increase; why would they if rates and allowances
When do you pay tax at Scottish Income Tax rates?
The Scottish rate of Income Tax (SRIT) is payable on the non-savings and non-dividend income of those defined as Scottish taxpayers.
The definition of a Scottish taxpayer depends on whether the taxpayer has a ‘close connection’ with Scotland or elsewhere in the UK. The liability to SRIT is not
Rent-a-room relief
The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. If you are using this scheme, you should ensure that rents received from lodgers during the current tax year do no exceed £7,500. The tax exemption is automatic if you earn less than £7,500
Tax-free savings interest
The Personal Savings Allowance (PSA) was launched in April 2016. For basic-rate taxpayers the first £1,000 of interest on savings income is tax-free. For higher-rate taxpayers the tax-free personal savings allowance is £500. Anyone earning over £125,140, in the current 2023-24 tax year, does not
Tax-free allowance on trading and property income
A reminder that there are two separate annual £1,000 tax allowances for property and trading income. If you have both types of income highlighted below, then you can claim a £1,000 allowance for each.
The £1,000 exemptions from tax apply in the following circumstances:
If you make up to £1,000
Losing your personal income tax allowance
If you earn over £100,000 in any tax year your personal allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. This means that any taxable receipt that boosts your income over £100,000 will result in a reduction in personal tax allowances.
Students and tax
Students that work may need to pay Income Tax and National Insurance. Employers are required to calculate the amount of tax they need to pay on the basis that the students would be working for the rest of the tax year.
This means that an overpayment of Income Tax can occur when a student or
Claim tax relief for charitable donations
The Gift Aid scheme is available to all UK taxpayers. The charity or Community Amateur Sports Clubs (CASC) concerned can take a taxpayer’s donation and, provided all the qualifying conditions are met, can reclaim the basic rate tax allowing for an extra 25p of tax relief on every pound donated to
Do you need to file a tax return
There are a number of reasons why you might need to complete a Self-Assessment return. This includes if you are self-employed, a company director, have an annual income over £100,000 and / or have income from savings, investment or property.
Taxpayers that need to complete a Self-Assessment return