Chapter 1 - UK Tax System Flashcards
What is income tax charged on?
Salaries from employment
Rental income from let properties
Interest from banks
Dividends from companies
Profits of self-employed
True or False
Scottish taxpayers pay income tax in respect of their non-savings income
True
What is the Welsh rate of income tax for 2024/25?
10%
When does the UK tax year run?
6th April - 5th April
Define trading income
Profits from a trade - a self-employer tax driver, builder, or plumber.
Trading income also covers profits from professions - a self-employed professional such as a barrister
Define property income
Income from land or buildings (such as rental income)
When discussing earnings & pensions income, what does ‘earnings,’ refer to?
Salaries
Bonuses
Non-cash benefits
What is an example of savings & investment income?
Interest arising from UK banks & building societies (interest income)
What type of income is dividends received from companies?
Investment income
Why must dividend income be kept separate from other types of investment income?
Because it has different tax rates
In what circumstance would an individual pay UK income tax on their worldwide earnings?
If they live and were born in the UK - they are considered a UK resident
What is miscellaneous income?
That income which does not fall within any of the predetermined categories of income
Is interest on National Savings (NS&I) Certificates & winnings on premium bonds exempt from tax?
Yes (ITTOIA 200, s692)
Is income from betting, gambling & lotteries exempt from income tax?
Yes
What social security benefits are exempt from income tax under ITEPA 2003 s677
Universal credit
Housing benefit
Winter fuel payments
What social security benefits ARE considered taxable income?
State pension
Job seekers allowance
Child benefit where a recipient has adjusted net income in excess of £60k
There are two types of tax credit that are exempt from income tax, what are they?
Child tax credit
Working tax credit
Are maintenance payments, scholarship awards, and ISA income tax free?
Yes
Dividends paid on what amount are exempt from income tax?
the first £200k on Venture Capital Trust shares acquired in any tax year
