How to Pay Taxes in the United Kingdom

08.05.2025 News

Reading time: 4 minutes

Rate:

0

Date published: 08.05.2025

Total views: 88

This article explains how to properly pay taxes in the United Kingdom, what steps must be taken by individuals and businesses, what difficulties may arise, and how to resolve them with the help of lawyers from the Consultant platform.

In the United Kingdom, taxes are paid by both individuals and companies. The main types of taxes include: Income Tax, National Insurance Contributions, Corporation Tax, Capital Gains Tax, VAT (Value Added Tax), and Stamp Duty Land Tax.

For individuals, the tax payment process is as follows:

• Determine tax residency status according to the Statutory Residence Test.
• Obtain a National Insurance Number for social contributions.
• If you are employed, taxes are withheld through the PAYE system. If you have additional income (self-employment, investments, foreign income), you must submit a Self Assessment Tax Return annually by 31 January.
• Pay the tax amount via bank transfer or through your online HMRC account.

For businesses, it is necessary to

1. Register the company with Companies House and submit information to HMRC.
2. Maintain accounting records and timely submit Annual Accounts and CT600.
3. Register for VAT if turnover exceeds the established threshold and submit regular VAT returns.
4. Pay Corporation Tax within nine months after the company's financial year end.

Common difficulties include

1. Incorrect determination of tax residency.
2. Late submission of Self Assessment or VAT reports.
3. Errors in PAYE tax codes.
4. Incorrect declaration of foreign income.
5. Failure to take advantage of available tax reliefs such as Personal Allowance or Marriage Allowance.
6. Failure to comply with Controlled Foreign Company (CFC) reporting obligations.

For individuals, it is also important to consider

• The possibility of qualifying for Non-Domiciled (Non-Dom) status to optimise taxation on foreign income.
• The obligation to declare foreign assets, including bank accounts and real estate.
• Strict deadlines for submitting tax returns: missing deadlines leads to fixed and accumulating penalties.
• The possibility of optimising investment income through Individual Savings Accounts (ISA).

To avoid mistakes

• Properly structure your income.
• Timely seek legal consultations regarding your tax status.
• Carefully prepare all forms and supporting documents.
• Check tax codes, especially when changing jobs.
• Avoid double taxation through proper handling of international obligations.