What is income tax in the UK?

Taxation is unwelcome by many. This article will be discussing one such tax in particular. It will be discussing income tax. İncome tax applies to all of those who work and if you want to learn more on this tax, please read on.

Taxation

What are taxes? Taxes are like fees charged by a government on a product, income or a service. If tax is levied directly on personal or corporate income, then this is known as a direct tax. If tax is levied on the price of a product or service, then it is called an indirect tax.The purpose of taxation is to basically finance government expenditure or the budget. Most importantly, taxes are used to finance public goods and services, such as street lighting and street cleaning. Since public goods and services do not allow a non-payer to be excluded, or allow exclusion by a customer, there cannot be a market in the good or service, and so they need to be provided by the government which tend to finance themselves largely through taxes. Taxes fund our public services.

Different types of taxes

Income tax
Income tax is a tax levied and paid on income. It is paid by employees and people who are self-employed. It may also be payable if you aren't working if, for example, you have an income from a pension or savings. Not all types of income are taxable and it will seldom be the case that all of your income is taxed. There is no minimum age at which a person becomes liable to pay income tax. The amount of income tax depends on various factors such as benefits, level of income, rental income and much more.
Tax evasion Tax evasion is when a person deliberately avoids paying their tax. This is a criminal offence and that person if caught can be levied with a large fine and made to repay all the owed due. In some cases, tax avoiders may be subject to serve time in prison. This applies in serious cases of tax evasion. You can find more information on taxes and the different types of taxes if you search online