🇬🇧 United Kingdom Tax Guide

In the UK, you don't pay tax on your first £12,570 of income each year - this is called your "personal allowance." After that, you pay 20% tax on earnings up to £50,270, then 40% on income between £50,270 and £125,140, and 45% on anything above that. If you're employed, your employer automatically takes the tax out of your paycheck each month through a system called PAYE (Pay As You Earn), so you don't need to do anything yourself. If you're self-employed or running your own business, you'll need to report your income to HMRC (the UK tax office) once a year and pay what you owe by January 31st.

On top of income tax, you also pay National Insurance - think of this as contributions toward your future state pension and access to the NHS. This is 12% on earnings between £12,570 and £50,270, then drops to just 2% above that. The UK tax year runs from April 6th to April 5th (not January to December like you might expect). You'll also encounter Council Tax (paid to your local area for services like rubbish collection), and VAT at 20% is already included in most shop prices. The good news: you can save up to £20,000 per year in an ISA (tax-free savings account), and money you put into a pension also reduces your tax bill.