Taxation

Income Tax

Is assessed and computed for a tax year 6 April to 5 April unless its a limited company when its 01 April to 31st March. The main types of income are:

  • Employment
  • Pension
  • Social security
  • Trading
  • Property
  • Interest
  • Dividends
  • Miscellaneous

That is what you can be taxed on … the bad news.  The good news is some income is exempt from income tax and should be ignored when preparing an income tax computation.  Some of the more important sources of exempt income are as follows:

  • Individual Savings Accounts
  • National Savings Certificates
  • interest arising from a Save As You Earn arrangemet linked to a tax-advantaged employee share option scheme
  • income from investments held in a Child Trust Fund account
  • dividends on shares held in a Venture Capital Trust (subject to certain conditions)
  • the operational allowance paid to UK armed forces serving in specified locations
  • bonus payment of up to £36,00 per annum received by employees of companies controlled by an employee ownership trust.
  • up to £30,000 compensation received for loss of employment
  • property or trading income of less than £1,000 a year

Advice should always be sought frome HMRC or an accountant when completing your tax return or the business tax return if you are un-sure on how to complete the tax return.