5.8.1 Income tax

People in the UK have to pay tax on their income, which includes:

wages from paid employment profits from self-employment taxable benefits pensions income from property, savings and dividends.

Money raised from income tax pays for government services such as roads, education, police and the armed forces.

For most people, the right amount of income tax is automatically taken from their income from employment by their employer and paid directly to HM Revenue & Customs (HMRC), the government department that collects taxes. This system is called ‘Pay As You Earn’ (PAYE). If you are self-employed, you need to pay your own tax through a system called ‘self-assessment’, which includes completing a tax return. Other people may also need to complete a tax return. If HMRC sends you a tax return, it is important to complete and return the form as soon as you have all the necessary information.

You can find out more about income tax at www.hmrc.gov.uk/incometax . You can get help and advice about taxes and completing tax forms from the HMRC self-assessment helpline, on 0845 300 0627, and the HMRC website at www.hmrc.gov.uk .