Your Tax Affairs in the UK

When working in the UK you have essentially 4 options:

1. PAYE

The easiest approach. Your employer will deduct your tax and National Insurance contributions at source. Depending on your income this will equate to approximately 25%.

2. Self Employment

All income is received gross and the onus falls on the individual to settle his/her taxation at the end of each tax year. Individuals who are self-employed may claim work related expenses which will reduce the overall tax and National Insurance liability. A set of self-employed accounts must be submitted yearly.

3. Sub-contracting under the Construction Industry Scheme (CIS)

As with self-employment above, although 18% taxation is deducted at source. The individual may apply for a refund at the end of each tax year depending on their earnings. A self-assessment tax return must be completed at the end of each tax year.

4. Limited Company

An individual contracts through his/her own Limited Company. Usually the most tax efficient method of operating ones tax affairs. See our Limited Company page for more information.