7 ms·

Here in the UK I don't need to file taxes at all as an employee.

consp 5y ago
You employer doesn't know your deductibles in the Netherlands due to privacy concerns (and other rules as well), which you definitely want to file in most cases since you pay less money or get some back. You are also responsible for your taxes, if the employer screws up you should check it. This is probably different from the UK. It is not a "can't do" but more or less a "won't do". edit: so it's not that different, just a different method of doing so. Good to know.
- wdb 5y ago
  I wouldn't know what I would be able to get tax relief for as an employee. What kind of deductibles? Guess, I could claim that £6 per week for Covid work from home stuff. Wish you could claim the cost of repairing your bike, or public transport costs.
  - maccard 5y ago
    Most of the big ones can be done without a self assessment. If you make a pension contribution for example, you can call hmrc and tell them and they'll adjust your tax code
    - RHSeeger 5y ago
      Doesn't that more or less equate to doing your taxes, just in little updates for each thing, rather than one big update at the end of the year?
      - maccard 5y ago
        Not at all. The list of things you can claim for is very limited, and the majority of them are automatically applied. Having to actually contact HMRC is a rarity. If you are salaried employee with no extra cash coming in, you don't need to do anything. Another example of how the system works - if you are working two jobs, both as a regular employee, HRMC will instruct your employer as to what your tax deduction should be for that paycheck to make sure that things are balanced. For <some large number>% of people, this will be correct, and if it's not, it will rectify itself over 2 or 3 pay periods. If that's _still_ not enough, a phone call to HMRC (usually taking less than 10 minuts for the two times in a decade I've had to do it) will resolve the issue in your next check.
  - ridiculous_fish 5y ago
    Charitable contributions? How are those treated?
    - joshuaissac 5y ago
      Those are claimed by the recipient under a programme called Gift Aid.
      - ridiculous_fish 5y ago
        Do I understand correctly that charities report contributions to the government, which then adjusts the taxes due from the donors? That seems like a good system.
        deleted 5y ago
        [deleted]
        joshuaissac 5y ago
        The tax relief goes to the charity itself, rather than the donor. They can claim a top-up of up to 25% of your donation from the government, as long as the total amount claimed by all donation recipients does not exceed the total annual income tax paid by the donor. So if you donate £100 and fill out a declaration saying that you 'Gift Aid' that donation, the charity can claim an additional £25 from the government, as long as you paid at least £25 in income taxes that financial year.
        oarsinsync 5y ago
        Note that if you're paying in the 40% and/or 45% income tax brackets, the charity doesn't know about that, and still only gets the 25% topup (equivalent to the 20% income tax most people pay). You can either: * Gift that remaining amount to HMRC by doing nothing (it will not go to the charity) * Claim it back (I don't know any other way to do this other than filing a self assessment)
        5y ago
  - ZeroGravitas 5y ago
    You can claim those, if you use the transport as part of your work but notably not for travelling to and from work, 20p per mile for the bike.
- maccard 5y ago
  Your employer doesn't need to know what your deductibles are (also the deductibles are much more limited here). If you, for example, make a large one off pension contribution, HMRC will adjust your tax code, which your employer will just apply to your payroll.
- philjohn 5y ago
  We can deduct far less than you can in the Netherlands - mortgage interest for example is deductible for you, but not in the UK. Someone on PAYE will have most of the deductibles handled by their employer (pension, any salary sacrifice schemes etc).
  - teh_klev 5y ago
    In the UK, deductibles on mortgage interest payments (known as MIRAS[0]) was abolished for private home owners in 2000. As a renter this kind of always stuck in my craw that homeowners got this preferential treatment and was quite glad it was abolished (even after becoming a "homeowner"). Oddly, buy-to-let landlords do retain this deductible, though HMRC have fiddled around with how this works over recent times[1]. [0]: https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_so... [1]: https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords https://www.gov.uk/government/publications/restricting-finan...
    - philjohn 5y ago
      Yes, the BTL sort of makes sense though if you view the mortgage as a business expense, but BTL has had a distorting effect on the UK housing market for too long - changes are desperately needed here, but with so many Tory donors being housing firms, it's unlikely to happen.
- pmyteh 5y ago
  You tell the tax office of any unusual deductibles, and they give your employers a 'tax code' which tells them how much allowance to give you (but critically not why, to better protect your privacy). Even this isn't needed in most cases; things are either done employer side (paid from pre-tax income, like pensions) or directly by the government (basic rate tax is semi-automatically added to charitable donations, so only higher rate taxpayers need to declare it, and they all fill in a short return anyway).
oarsinsync 5y ago
That's likely true because like the majority of people, you don't make enough money, or wont see enough benefit from the effort involved. Anyone earning over £100k a year is required to file a self assessment, and if you've reached that point, you also likely have a bunch of tax deductible expenses, that even if the £-value is low, you're going to include in your filing since you're doing it anyway.
thrwyoilarticle 5y ago
You would need to if you earned 6 figures. So copying our system for the American posters here wouldn't solve their problem.
- laurencerowe 5y ago
  You can file for self assessment online through HMRC’s website. It was substantially less complex than the online tax filing website I pay in the US.
chrisseaton 5y ago
This is only true for people earning below a threshold - most professionals in the UK will need to file taxes, but accountants are very cheap here.
- onion2k 5y ago
  This is only true for people earning below a threshold - most professionals in the UK will need to file taxes That simply isn't true. An income of £80,000 puts you in the top 4% of adult earners. A salary of £100,000 is probably in the top 2 or 3%. This was discussed extensively at the last election when Labout proposed a new tax rate for people earning over £125k https://election2019.ifs.org.uk/article/labour-s-proposed-income-tax-rises-for-high-income-individuals https://election2019.ifs.org.uk/article/labour-s-proposed-in...
  - robertlagrant 5y ago
    Worth noting that if someone is a contractor they'll need to file taxes, even if they pay themselves a lower wage (and thus wouldn't show up in the high earners stats). If they're an NHS doctor/nurse who also does some private work, same. Or anyone who has more than one employer, or is in the gig economy. It's not vast swathes of people, but I think it'd be more than 2 or 3%.
    - tialaramex 5y ago
      No. I don't like paperwork. So, I don't do paperwork. It can be more tax efficient to file tax paperwork, but I don't want to do paperwork, so I just had an umbrella employ me when somebody insisted on hiring me as a "contractor" and the umbrella handled the paperwork for which of course they keep a fee. As far as the government is concerned I just had two PAYE employers, the umbrella and my "real" job. Having multiple employers also does not require filing taxes. One of the employers gets given a zero tax code and they tax all your pay at full rate, the other one gets a normal tax code which reflects your personal allowance and other considerations. My tax code was oscillating all over the place - but that's not a problem it's all automated. If you love paperwork you can choose to do all the paperwork. Or if you love money and don't hate paperwork maybe you can save a few hundred quid by filing and I hope it makes you happy. I hate paperwork, and I have plenty of money. So, no, despite earning a lot of money and having worked as a contractor I preferred to stick with PAYE.

You employer doesn't know your deductibles in the Netherlands due to privacy concerns (and other rules as well), which you definitely want to file in most cases since you pay less money or get some back. You are also responsible for your taxes, if the employer screws up you should check it. This is probably different from the UK. It is not a "can't do" but more or less a "won't do". edit: so it's not that different, just a different method of doing so. Good to know.

wdb 5y ago
I wouldn't know what I would be able to get tax relief for as an employee. What kind of deductibles? Guess, I could claim that £6 per week for Covid work from home stuff. Wish you could claim the cost of repairing your bike, or public transport costs.
- maccard 5y ago
  Most of the big ones can be done without a self assessment. If you make a pension contribution for example, you can call hmrc and tell them and they'll adjust your tax code
  - RHSeeger 5y ago
    Doesn't that more or less equate to doing your taxes, just in little updates for each thing, rather than one big update at the end of the year?
    - maccard 5y ago
      Not at all. The list of things you can claim for is very limited, and the majority of them are automatically applied. Having to actually contact HMRC is a rarity. If you are salaried employee with no extra cash coming in, you don't need to do anything. Another example of how the system works - if you are working two jobs, both as a regular employee, HRMC will instruct your employer as to what your tax deduction should be for that paycheck to make sure that things are balanced. For <some large number>% of people, this will be correct, and if it's not, it will rectify itself over 2 or 3 pay periods. If that's _still_ not enough, a phone call to HMRC (usually taking less than 10 minuts for the two times in a decade I've had to do it) will resolve the issue in your next check.
- ridiculous_fish 5y ago
  Charitable contributions? How are those treated?
  - joshuaissac 5y ago
    Those are claimed by the recipient under a programme called Gift Aid.
    - ridiculous_fish 5y ago
      Do I understand correctly that charities report contributions to the government, which then adjusts the taxes due from the donors? That seems like a good system.
      - deleted 5y ago
        [deleted]
      - joshuaissac 5y ago
        The tax relief goes to the charity itself, rather than the donor. They can claim a top-up of up to 25% of your donation from the government, as long as the total amount claimed by all donation recipients does not exceed the total annual income tax paid by the donor. So if you donate £100 and fill out a declaration saying that you 'Gift Aid' that donation, the charity can claim an additional £25 from the government, as long as you paid at least £25 in income taxes that financial year.
        oarsinsync 5y ago
        Note that if you're paying in the 40% and/or 45% income tax brackets, the charity doesn't know about that, and still only gets the 25% topup (equivalent to the 20% income tax most people pay). You can either: * Gift that remaining amount to HMRC by doing nothing (it will not go to the charity) * Claim it back (I don't know any other way to do this other than filing a self assessment)
        5y ago
- ZeroGravitas 5y ago
  You can claim those, if you use the transport as part of your work but notably not for travelling to and from work, 20p per mile for the bike.
maccard 5y ago
Your employer doesn't need to know what your deductibles are (also the deductibles are much more limited here). If you, for example, make a large one off pension contribution, HMRC will adjust your tax code, which your employer will just apply to your payroll.
philjohn 5y ago
We can deduct far less than you can in the Netherlands - mortgage interest for example is deductible for you, but not in the UK. Someone on PAYE will have most of the deductibles handled by their employer (pension, any salary sacrifice schemes etc).
- teh_klev 5y ago
  In the UK, deductibles on mortgage interest payments (known as MIRAS[0]) was abolished for private home owners in 2000. As a renter this kind of always stuck in my craw that homeowners got this preferential treatment and was quite glad it was abolished (even after becoming a "homeowner"). Oddly, buy-to-let landlords do retain this deductible, though HMRC have fiddled around with how this works over recent times[1]. [0]: https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_source https://en.wikipedia.org/wiki/Mortgage_interest_relief_at_so... [1]: https://www.gov.uk/government/publications/restricting-finance-cost-relief-for-individual-landlords/restricting-finance-cost-relief-for-individual-landlords https://www.gov.uk/government/publications/restricting-finan...
  - philjohn 5y ago
    Yes, the BTL sort of makes sense though if you view the mortgage as a business expense, but BTL has had a distorting effect on the UK housing market for too long - changes are desperately needed here, but with so many Tory donors being housing firms, it's unlikely to happen.
pmyteh 5y ago
You tell the tax office of any unusual deductibles, and they give your employers a 'tax code' which tells them how much allowance to give you (but critically not why, to better protect your privacy). Even this isn't needed in most cases; things are either done employer side (paid from pre-tax income, like pensions) or directly by the government (basic rate tax is semi-automatically added to charitable donations, so only higher rate taxpayers need to declare it, and they all fill in a short return anyway).

oarsinsync 5y ago

That's likely true because like the majority of people, you don't make enough money, or wont see enough benefit from the effort involved. Anyone earning over £100k a year is required to file a self assessment, and if you've reached that point, you also likely have a bunch of tax deductible expenses, that even if the £-value is low, you're going to include in your filing since you're doing it anyway.

thrwyoilarticle 5y ago

You would need to if you earned 6 figures. So copying our system for the American posters here wouldn't solve their problem.

laurencerowe 5y ago
You can file for self assessment online through HMRC’s website. It was substantially less complex than the online tax filing website I pay in the US.

chrisseaton 5y ago

This is only true for people earning below a threshold - most professionals in the UK will need to file taxes, but accountants are very cheap here.

onion2k 5y ago
This is only true for people earning below a threshold - most professionals in the UK will need to file taxes That simply isn't true. An income of £80,000 puts you in the top 4% of adult earners. A salary of £100,000 is probably in the top 2 or 3%. This was discussed extensively at the last election when Labout proposed a new tax rate for people earning over £125k https://election2019.ifs.org.uk/article/labour-s-proposed-income-tax-rises-for-high-income-individuals https://election2019.ifs.org.uk/article/labour-s-proposed-in...
- robertlagrant 5y ago
  Worth noting that if someone is a contractor they'll need to file taxes, even if they pay themselves a lower wage (and thus wouldn't show up in the high earners stats). If they're an NHS doctor/nurse who also does some private work, same. Or anyone who has more than one employer, or is in the gig economy. It's not vast swathes of people, but I think it'd be more than 2 or 3%.
  - tialaramex 5y ago
    No. I don't like paperwork. So, I don't do paperwork. It can be more tax efficient to file tax paperwork, but I don't want to do paperwork, so I just had an umbrella employ me when somebody insisted on hiring me as a "contractor" and the umbrella handled the paperwork for which of course they keep a fee. As far as the government is concerned I just had two PAYE employers, the umbrella and my "real" job. Having multiple employers also does not require filing taxes. One of the employers gets given a zero tax code and they tax all your pay at full rate, the other one gets a normal tax code which reflects your personal allowance and other considerations. My tax code was oscillating all over the place - but that's not a problem it's all automated. If you love paperwork you can choose to do all the paperwork. Or if you love money and don't hate paperwork maybe you can save a few hundred quid by filing and I hope it makes you happy. I hate paperwork, and I have plenty of money. So, no, despite earning a lot of money and having worked as a contractor I preferred to stick with PAYE.