The short version: Tax is money you pay to the government to fund public services. Roads, schools, hospitals, defence, benefits. Everyone who earns money or buys things contributes in some way.
How do you pay it?
Employees pay through PAYE, where your employer deducts tax before you receive your wages. Self employed people and those with other untaxed income pay through Self Assessment. VAT is added to most purchases automatically.
What types are there?
Income Tax on earnings. National Insurance on employment and self employment income. Capital Gains Tax on profits from selling assets. VAT on goods and services. Stamp Duty on property purchases. Inheritance Tax on estates. Corporation Tax on company profits. And more.
Can you reduce what you pay?
Legally, yes. Using allowances, reliefs, ISAs, pensions, and structuring things efficiently. That’s tax planning. Illegally hiding income is tax evasion, which comes with serious consequences.
Want to make sure you’re not paying more than you need to? Talk to us about your situation.
