Taxpayer

A taxpayer is a person or a business who is supposed to pay taxes to the government. There are lots of different types of taxpayer. Generally, you should know whether you are or not. If you’re unsure whether you qualify as a UK taxpayer, have a look at the list below and, if you answer yes to these questions, you are indeed a UK taxpayer!

  • You’re a tax resident of a country (UK or otherwise)
  • You earn a regular income
  • You’re able to use the NHS or other state provided benefits
  • You reside in the UK for 183 days or more every year
  • You have a National Insurance number

Sometimes you can be a taxpayer even if you’re not a tax resident – it really depends on the Double Taxation Agreements between the UK and your home country. A Double Taxation Agreement (DTA) is an agreement between two countries. It prevents you from paying tax twice on the same income. If both countries have a Double Taxation Agreement, you don’t pay additional tax on the same income, but you may still have to file a tax return in both countries. Some examples of jobs roles that may need to be aware of Double Taxation Agreement laws include cruise ship workers, freelance consultants who work abroad as part of their role, or diplomatic or embassy workers.

How does a UK taxpayer pay tax?

In the UK, there are three main ways to pay tax:

  1. Deducted at source: this means that your tax is deducted automatically and forwarded to HMRC. An example of this is when your employer deducts your Income Tax and National Insurance through PAYE (Pay As You Earn) and then sends it to HMRC
  2. Calculated and paid by you: when you’re self-employed, you need to file a Self Assessment tax return. You calculate your own taxable profit (earnings minus expenses and allowances), and then pay HMRC directly
    • You usually pay in one go but there are options to split the payments
    • If you’re employed and self-employed, you can pay all of the tax you owe via your tax code
  1.  A flat tax: Council Tax is an example of this, which is calculated based on your residence and is paid manually by you, either by Direct Debit, BACs or by cheque.

There are also one-off taxes that you may need to pay if the circumstances arise. These include Stamp Duty for the purchase of a property, or Inheritance Tax if you receive part of an estate in someone’s will.

Frequently Asked Questions

Search More Terms

View our latest news & insights

14 February 2024
Navigating the landscape of business taxes in the UK can seem daunting, especially given the range of taxes that might a...
Navigating the landscape of business taxes in the UK can seem daunting, especially given the range of taxes that might apply to your organization. However, understanding which taxes are relevant to your business is crucial for com...
17 January 2024
Your business has costs to deal with and pay as part of their day-to-day trade and as part of ad hoc strategies. They ty...
Your business has costs to deal with and pay as part of their day-to-day trade and as part of ad hoc strategies. They typically range from phone line bills, postage and stationery to computer software and travel costs. Being the o...