4 ms·

In the UK, payroll and savings income is taxed at source and around 80-85% of people don't need to complete a tax return. You only need to complete one if you h

In the UK, payroll and savings income is taxed at source and around 80-85% of people don't need to complete a tax return. You only need to complete one if you have other income, if you're self-employed with over £1000 revenue, had capital gains over £6000, or earn over £100,000. Almost everyone completes these online, and you can do it directly on the government site. For simple cases that only takes a few minutes. It took me about an hour this year because I've been bad at keeping track of side project income. The form itself is easy.

mulmen 3y ago
Thanks for the explanation, I only did a quick search. Is there a capital gains tax in the UK? Do you have tax deductions? Edit: I looked it up. Yes, the UK has capital gains taxes and they must be calculated by the taxpayer. https://www.gov.uk/capital-gains-tax/reporting-and-paying-capital-gains-tax https://www.gov.uk/capital-gains-tax/reporting-and-paying-ca... There are also deductions for savings and dividends. Those deductions look a lot like the US deductions. They also (sometimes?) have to be calculated by the taxpayer. https://www.gov.uk/apply-tax-free-interest-on-savings https://www.gov.uk/apply-tax-free-interest-on-savings
- ifwinterco 3y ago
  There used to be relatively generous yearly allowances for savings (£1,000) dividends (£2,000) and CGT (£12,300) which meant most people would be exempt and not have to fill in a tax return. Saving interest is often paid gross but if you go over the savings allowance and don't fill in a tax return HMRC will just automatically take more tax from your payslip. There is also a £20,000/year ISA allowance which shields investment from tax so any holdings within an ISA can be ignored for tax purposes. However, the dividend and CGT allowances have been reduced recently as the government tries to find ways to raise more revenue without raising the headline tax rates, and the £20k ISA allowance hasn't been raised for years despite inflation. So as it stands, in the future a lot more people will have to start filling in tax returns.
  - mulmen 3y ago
    Thanks for that context. Interest and capital gains come in sooner for Americans. Plus we have way more deductions. I can deduct business use of a home office and personal vehicle. That’s not something the IRS can know.

mulmen 3y ago

Thanks for the explanation, I only did a quick search. Is there a capital gains tax in the UK? Do you have tax deductions? Edit: I looked it up. Yes, the UK has capital gains taxes and they must be calculated by the taxpayer. https://www.gov.uk/capital-gains-tax/reporting-and-paying-capital-gains-tax https://www.gov.uk/capital-gains-tax/reporting-and-paying-ca... There are also deductions for savings and dividends. Those deductions look a lot like the US deductions. They also (sometimes?) have to be calculated by the taxpayer. https://www.gov.uk/apply-tax-free-interest-on-savings https://www.gov.uk/apply-tax-free-interest-on-savings

ifwinterco 3y ago
There used to be relatively generous yearly allowances for savings (£1,000) dividends (£2,000) and CGT (£12,300) which meant most people would be exempt and not have to fill in a tax return. Saving interest is often paid gross but if you go over the savings allowance and don't fill in a tax return HMRC will just automatically take more tax from your payslip. There is also a £20,000/year ISA allowance which shields investment from tax so any holdings within an ISA can be ignored for tax purposes. However, the dividend and CGT allowances have been reduced recently as the government tries to find ways to raise more revenue without raising the headline tax rates, and the £20k ISA allowance hasn't been raised for years despite inflation. So as it stands, in the future a lot more people will have to start filling in tax returns.
- mulmen 3y ago
  Thanks for that context. Interest and capital gains come in sooner for Americans. Plus we have way more deductions. I can deduct business use of a home office and personal vehicle. That’s not something the IRS can know.