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Income tax
- People in the UK have to pay tax on their income, which includes: wages from paid employment, profits from self-employment, taxable benefits, pensions, income from property, savings and dividends.
- Money raised from income tax pays for government services such as roads, education, police and the armed forces.
- For most people, the right amount of income tax is automatically taken from their income from employment by their employer and paid directly to HM Revenue & Customs (HMRC), the government department that collects taxes.
- This system is called “Pay As You Earn” (PAYE).
- If you are self-employed, you need to pay your own tax through a system called ‘self-assessment’, which includes completing a tax return.
- Other people may also need to complete a tax return.
- If HMRC sends you a tax return, it is important to completed and return the form as soon as you have all the necessary information.
- You can find out more about income tax at www\.gov.uk/income-tax.
- You can get help and advice about taxes and completing tax forms from the HMRC self-assessment helpline on 0300 200 3310, and by visiting https\://www\.gov.uk/government/organisations/hm-revenue-customs.
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National Insurance
- Almost everybody in the UK who is in paid work, including self-employed people, must pay National Insurance Contributions.
- The money raised from National Insurance Contributions is used to pay for state benefits and services such as the state retirement pension and the National Health Service (NHS).
- Employees have their National Insurance Contributions deducted from their pay by their employer.
- People who are self-employed need to pay National Insurance Contributions themselves.
- Anyone who does not pay enough National Insurance Contributions will not be able to receive certain contributory benefits such as Jobseeker’s Allowance or a full state retirement pension.
- Some workers, such as part-time workers, may not qualify for statutory payments such as maternity pay if they do not earn enough.
- Further guidance about National Insurance Contributions is available on https\://www\.gov.uk/national-insurance.
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Getting a National Insurance number
- A National Insurance number is a unique personal account number.
- It makes sure that the National Insurance Contributions and tax you pay are properly recorded against your name.
- All young people in the UK are sent a National Insurance number just before their 16th birthday.
- A non-UK national living in the UK and looking for work, starting work or setting up as self-employed will need a National Insurance number.
- However, you can start work without one.
- If you have permission to work in the UK, you will need to telephone the National Insurance number application line.
- After you’ve applied, you’ll get a letter from the Department for Work and Pensions (DWP) asking you to come to a National Insurance number interview at Jobcentre Plus.
- The letter will also tell you which documents to bring to proof your identity.
- You can find out more information about how to apply for a National Insurance number at https\://www\.gov.uk/apply-national-insurance-number.
- You may be required to attend an interview.
- The DWP will advise you of the appropriate application process and tell you which documents you will need to bring to an interview if one is necessary.
- You will usually need documents that prove your identity and that you have permission to work in the UK.
- A National Insurance number does not on its own prove to an employer that you have the right to work in the UK.
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Driving
- In the UK, you must be at least 17 years old to drive a car or motorcycle and you must have a driving licence to drive on public roads.
- To get a UK driving licence you must pass a driving test, which tests both your knowledge and your practical skills.
- You need to be at least 16 years old to ride a moped, and there are other age requirements and special tests for driving large vehicles.
- Drivers can use their driving licence until they are 70 years old.
- After that, the licence is valid for three years at a time.
- In Northern Ireland, a newly qualified driver must display an ‘R’ plate (for restricted driver) for one year after passing the test.
- If you have a licence from another country, you may use it in the UK for up to 12 months.
- To continue driving after that, you must get a UK full driving licence.
- To check that you can drive in the UK with a non-GB licence, visit www\.gov.uk/driving-nongb-licence.
- If you are resident in the UK, your car or motorcycle must be registered at the Driver and Vehicle Licensing Agency (DVLA).
- You must pay an annual vehicle tax, which cannot be passed on when a vehicle changes hands.
- If the vehicle is parked off the road and not being use, you must tell DVLA by making a Statutory Off Road Notification (SORN).
- SORN cannot be transferred if the vehicle is sold or given to a new owner.
- You must also have valid motor insurance.
- It is a serious criminal offence to drive without insurance.
- If your vehicle is over three years old, you must take it to the Ministry of Transport (MOT) test every year.
- It is an offence not to have a MOT certificate if your vehicle is more than three years old.
- You can find out more about vehicle tax and MOT requirements from www\.gov.uk.
✅ Self-check — can you explain each of these?