The UK Tax System

Question 1

Approximately how many people pay taxes in the UK?

Answer 1

31 million

Question 2

What is HM Revenue and Customs responsible for?

Answer 2

Administering and collecting taxes in the UK

Question 3

Who is obliged to pay taxes in the UK?

Answer 3

Residents and individuals who run business operations

Question 4

What are the basic UK taxes

Answer 4

Income taxes
Property taxes
Capital gains
UK inheritance
Value added tax (VAT)

Question 5

What does progressive taxes mean?

Answer 5

Those on higher incomes pay at higher rates (tax brackets/bands)

Question 6

What is tax-free allowance?

Answer 6

The amount of income whereby you don’t need to pay taxes (£12,500)

Therefore for example, someone who makes £17,000 must pay taxes

Question 7

What are the three tax brands?

Answer 7

Personal allowance (up to £12,500, tax rate 0%)

Basic rate (£12,500 to £50,000, tax rate 20%)

Higher rate (£50,000 to £150,000, tax rate 40%)

Question 8

How is tax calculated?

Answer 8

tax rate % of Income - personal allowance (£12,500)

Question 9

To pay tax do you need a national insurance number?

Answer 9

Yes

Question 10

What are national insurance contributions (NICs) ?

Answer 10

Money taken from your earned income

Question 11

What is the threshold for Class 1 NICs

Answer 11

£9500 a year

If you earn less than that you won’t pay NICs