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You will be paying tax in some way or another whether you are a student, working or claiming benefits. Here we try to explain what tax is, what it is used for and when and how you will have to pay it. National Insurance could also be thought of as a tax so we’ll explain that as well.
Tax is the way the Government raises money to pay for services such as the National Health Service (NHS), education, housing and roads. The different rates of tax are set each year by the Chancellor in his budget speech. There are many different types of tax. Outlines below are the main ones which will affect you.
Tax paid when you buy, sell or give things away
We shan’t concentrate too much on these at this point.
Tax on goods and services
Tax on local services
You can see that you can’t evade paying tax! In fact it is a criminal offence to do so. We will look at some of these taxes in more detail with special attention on those that you will face as a student or when you go to work for the first time. Before that it is worthwhile making a distinction.....
What Is A Tax Code?
How Much Income Tax Will You Pay?
0% on £11,850 (if you get full personal allowance) = 0
20% on next £34,500 = £6,900
40% on £10,650 (£57,000 - £11,850 - £34,500) = £4,260
So your tax bill for that year should be £10,160
Paying The Right Amount
What If You Only Work Part-Time Or Over The Holidays?
National Insurance Contributions (NIC)
Keep the paperwork that contain details of your pay and tax safe. This will help you complete your tax return, apply for benefits and tax credits and reclaim overpaid tax. Things like.....