UK inland revenue
Each and every employer in the UK has to register as an employer with the tax authority.Normally registration takes place up to four weeks before the first qualifying employee is engaged.Paye is a system under which the employers deduct income tax and national insurance.This deduction can be on weekly or monthly basis depending on the wage and salary payments made to the employee.This amount is utilized by the employers to pay the income tax and national insurance contribution to the inland revenue of the UK every month.
The employer also keeps a record of the employers contributions towards the national insurance.Their contributions with the employee deductions will be paid to the tax authority on or before the 19th of the next month from the pay period.PAYE administration requires the calculation of income tax applying a tax code system. Each employee is apportioned a tax code which comprises of a number which is more or less equal to one tenth of the personal tax allowance.
The financial tax year in the UK is from 6 April one year to 5 April the next year. Each tax year is divided into 53 specific weeks or into 12 monthly periods. The employer who operates the PAYE scheme deducts the tax and calculates on a cumulative basis during the tax year.
For calculating the income tax the employer determines the cumulative tax free allowance for a specific period and then deducts this amount from the accumulative gross pay. This gross pay includes all the current wages or salaries and any other previous incomes earned during the current period which also includes incomes from other employers also.From this taxable amount the percentage of tax to be paid is calculated.
The Inland Revenue of UK is responsible for the administration of various taxes as follows :-
* Tax from various heads of income.* Tax from Corporation
* Tax from capital gains
* Taxes from petroleum revenue
* Inheritance tax
* Contributions towards national insurance.
* Stamp duties.
The Inland Revenue UK is also responsible for the payment of :-
* Working Tax Credit
* Child Tax Credit
* Child Benefit
In addition to this the inland revenue of UK also extends its services as follows:
* Electronic Services
* HM Revenue & Customs Advice Teams
* National Minimum Wage
* Payroll giving for charity purposes.
* Tax back
* Collection of student loan repayments
* Tax-exempt heritage assets.
* Valuation Office Agency
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