The tax you will pay

Tax in the UK will come in various forms.  There are two types of income based taxes that you should be aware of:

  • Income Tax
  • National Insurance

Income Tax

Income Tax in the UK works on a fairly simple increment system.  There are two increments:

 Rates Increment
 Basic rate: 20% Up to £37,400 
 Higher rate: 40%    £37,401 - £150,000 
 Additional rate: 50%   Over £150,000

NB: The increments only start after your tax free allowance.  For most people this allowance is £6,475, ie. the basic rate applies to the £37,400 after this.

The increments are reviewed annually on the 5th of April.

National Insurance

National Insurance is a government scheme where people in work make compulsory contributions which go towards funding the state benefits system in the UK.

Every employee and employer in the UK is responsible for paying National Insurance Contributions as long as the employees pay is over the specified threshold.  This means that unlike income tax, the employer is also paying National Insurance as well as yourself.

 Type  Rate Threshold  
 Employers National Insurance    12.8%    Above £5,715
 Employees National Insurance 11% £5,715 - £43,875  
   plus
  1% Above £43,875

For non UK residents wishing to make claim upon leaving the country or for any other UK Tax queries, we recommend going to the HM Revenue & Customs website.

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