Taxation

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 completed and return the form as soon as you have all the necessary information.

You can find out more about income tax at www.gov.uk/income-tax . You can get help and advice about taxes and completing tax forms from the HMRC self-assessment helpline on 0300 200 3310, and by visiting https://www.gov.uk/government/organisations/hm-revenue-customs .

National Insurance

Almost everybody in the UK who is in paid work, including self-employed people, must pay National Insurance Contributions. The money raised from National Insurance Contributions is used to pay for state benefits and services such as the state retirement pension and the National Health Service (NHS).

Employees have their National Insurance Contributions deducted from their pay by their employer. People who are self-employed need to pay National Insurance Contributions themselves.

Anyone who does not pay enough National Insurance Contributions will not be able to receive certain contributory benefits such as Jobseeker’s Allowance or a full state retirement pension. Some workers, such as part-time workers, may not qualify for statutory payments such as maternity pay if they do not earn enough.

Further guidance about National Insurance Contributions is available on https://www.gov.uk/national-insurance .

Getting a National Insurance number

A National Insurance number is a unique personal account number. It makes sure that the National Insurance Contributions and tax you pay are properly recorded against your name. All young people in the UK are sent a National Insurance number just before their 16th birthday.

A non-UK national living in the UK and looking for work, starting work or setting up as self-employed will need a National Insurance number. However, you can start work without one. If you have permission to work in the UK, you will need to telephone the National Insurance number application line. After you’ve applied, you’ll get a letter from the Department for Work and Pensions (DWP) asking you to come to a National Insurance number interview at Jobcentre Plus. The letter will also tell you which documents to bring to proof your identity.

You can find out more information about how to apply for a National Insurance number at https://www.gov.uk/apply-national-insurance-number .

Driving

In the UK, you must be at least 17 years old to drive a car or motorcycle and you must have a driving licence to drive on public roads. To get a UK driving licence you must pass a driving test, which tests both your knowledge and your practical skills. You need to be at least 16 years old to ride a moped, and there are other age requirements and special tests for driving large vehicles.

Drivers can use their driving licence until they are 70 years old. After that, the licence is valid for three years at a time.

In Northern Ireland, a newly qualified driver must display an ‘R’ plate (for restricted driver) for one year after passing the test.

If you have a licence from another country, you may use it in the UK for up to 12 months. To continue driving after that, you must get a UK full driving licence. To check that you can drive in the UK with a non-GB licence, visit www.gov.uk/driving-nongb-licence .

If you are resident in the UK, your car or motorcycle must be registered at the Driver and Vehicle Licensing Agency (DVLA). You must pay an annual vehicle tax, which cannot be passed on when a vehicle changes hands. If the vehicle is parked off the road and not being use, you must tell DVLA by making a Statutory Off Road Notification (SORN). SORN cannot be transferred if the vehicle is sold or given to a new owner. You must also have valid motor insurance. It is a serious criminal offence to drive without insurance. If your vehicle is over three years old, you must take it to the Ministry of Transport (MOT) test every year. It is an offence not to have a MOT certificate if your vehicle is more than three years old. You can find out more about vehicle tax and MOT requirements from www.gov.uk .