Apr 12, 2018 No Comments
Some of the most important things in life are not taught to you. So we thought we would take it upon ourselves and tell you some of the basic tax facts which you need to know!
Everyone in the UK is liable to pay tax, however not everyone is allegeable to pay it, take a look at these two points below.
Only people who earn over the personal allowance will need to pay tax. If you do not earn enough, then you will not need to pay tax. At the start of every tax year the personal allowance is updated, with the tax year running from April to April.
There are two types of income; taxable income and non-taxable income. See what the difference is below.
This includes income such as wages, interest, job perks etc. Which means you will have to pay tax on this type of income.
This is income such as your student finance package, including most bursaries, grants and scholarships. It also includes child tax credit and disability living allowance etc. Meaning this doesn’t count towards your personal allowance and as such will not have to pay tax on this type of income.
If you do earn income, then make sure to constantly check your wage slip. The ‘Pay as you earn’ scheme typically overtaxes students as it does not calculate in this aspect. If you have been over taxed, then you can reclaim it at the end of the tax year. Make sure to keep check of it and understand when you should and shouldn’t be taxed.
Your bank account will automatically tax any interest your money earns before its added to into your account. Therefore, get yourself an ISA, this lets you earn tax-free interest on up to £20,000 per year. So whatever interest you earn, will keep in the ISA year on year.
For more useful hints and tips, take a look at our blog page. Everything you need to know as a student helping you through university in Newcastle Upon Tyne.