The UK uses a progressive, marginal tax system. This means that as your income rises, each additional slice is taxed at a higher rate, but only that slice, never your entire income.
Paying below the National Minimum Wage is not a technical breach that quietly slips through the system. It is a criminal offense, triggers automatic penalties of up to 200% of any underpayment.
A sole trader claiming £1,000 of expenses at the basic rate saves £200 in income tax. A higher-rate taxpayer saves £400.
Statutory Sick Pay (SSP) is the minimum amount an employer must pay to an eligible employee who is off work due to sickness.
An HMRC investigation is not an accusation of fraud. Most inquiries arise from data matching, statistical analysis, or random selection, and many are closed without any adjustment to the tax position.
Salary sacrifice, also called salary exchange, is an arrangement where an employee agrees to give up part of their gross salary, and the employer pays that amount directly into their pension.
Capital Gains Tax is charged on the gain you make when you dispose of an asset that has increased in value. For property, the disposal is typically a sale.
A P60, formally known as the End of Year Certificate, is a statutory document issued by employers under the UK’s Pay As You Earn (PAYE) system.
When you contribute to a registered pension scheme, the government effectively returns the income tax you would have paid on that money.