Tax

This section tells you about the different types of tax you are likely to pay. As well as Income Tax it includes brief information on Valued Added Tax (VAT), Inheritance Tax and Capital Gains Tax. It also includes brief information on National Insurance which isn't strictly a tax but fits well in this section. It also includes some information about self assessment.

Tax affects nearly everybody. If you go down to your local shop and buy a packet of chocolate biscuits, VAT will already have been added to the original price. If you are working then when you earn above a certain amount you will have to pay Income Tax. You may have to pay a local council tax related to the value of the property you live in. Some goods attract special taxes such as alcohol, cigarettes and petrol. Even some state benefits are taxed.

Tax can be fair or unfair depending on your viewpoint. But without it the Government would have nothing to spend on public services like education, the NHS, welfare benefits and so on. Some people don't agree with some of the things tax is spent on (e.g. nuclear weapons) but it is an essential part of life and it pays for services.

The Government department responsible for the collection of most taxes including VAT is HM Revenue and Customs (HMRC). HMRC has offices, including Enquiry Centres in most cities in the UK. Your nearest office will be in the phone book or you can find it online >>

One of the biggest changes in the tax system for a long time is self-assessment which affects a lot of people who pay tax. You can see who needs to fill in a self assessment tax return >>

[The National Youth Agency wishes to thank LITRG for providing this information and helping us to ensure the information we are providing is up to date.]