Tax Glossary


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Last updated on:
March 17, 2024

A taxpayer is any individual or entity obligated to contribute taxes to the government's coffers. This concept extends across various forms, from individuals to businesses, each bearing the responsibility of contributing to the public treasury.

Identifying as a Taxpayer

Determining whether you fall under the taxpayer category involves a few key indicators, such as:

  • Being a tax resident in a country, including the UK or elsewhere.
  • Earning an income that falls within taxable brackets.
  • Utilizing public services and benefits, such as the NHS in the UK.
  • Spending 183 days or more within the UK during a tax year.
  • Possession of a National Insurance number.

Notably, tax obligations can apply even to those not residing within the tax jurisdiction, subject to the specifics of Double Taxation Agreements between the UK and other nations.

Types of Taxpayers and Tax Payments in the UK

Tax payment methods in the UK can be categorised broadly into three:

  1. Deductions at Source: This method involves automatic deduction of taxes by an employer or pension provider, who then remits these to HMRC under the PAYE system.
  2. Self-Calculated Payments: Self-employed individuals and those with additional untaxed income must calculate their tax dues and pay HMRC directly, typically through a Self Assessment tax return.
  3. Flat Taxes: Examples include Council Tax, predetermined rates based on your living arrangements, paid directly by the taxpayer.

Understanding your position as a taxpayer is pivotal in navigating the complexities of tax contributions effectively.

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