What is taxed

Most people in the UK get a Personal Allowance of tax-free income. This is the amount of income you can have before you pay tax. The amount of tax you pay can also be reduced by tax reliefs if you qualify for them. Check what you need to do. To help us improve GOV. It will take only 2 minutes to fill in.

Cookies on GOV. UK We use some essential cookies to make this website work. Accept additional cookies Reject additional cookies View cookies. For more information on taxable and tax-free income, you may find these sections of this website helpful: Employment: What income is taxable? Self-employment: How do I work out my taxable profits?

Pensioners: What income is taxable? What tax allowances am I entitled to? What tax rates apply to me? How is my tax collected? What if I cannot pay my tax bill? Do I need to complete a tax return? Self Assessment: understanding the basics What is Simple Assessment? How do I claim tax back? How do I claim back tax if I complete a tax return?

How do I claim back tax on savings income? How do I claim a marriage allowance refund? How do I claim back tax on a payment protection insurance PPI pay-out? Should I use a tax refund company? What is National Insurance? How do I get a National Insurance number?

What are Adult Specified Childcare credits? What is Scottish income tax? What is devolution? Do I have to pay Scottish income tax? How does Scottish income tax work? What is Welsh income tax? Do I have to pay Welsh income tax? Do I have to join a pension scheme? What if I have a tax credits overpayment?

Working through a limited company What is the national minimum wage? How do I work out my tax? How is tax collected on taxable state benefits? How do I check my coding notice? What tax do I pay on redundancy payments? Termination payments on leaving the armed forces Employment benefits and expenses What are benefits-in-kind? What payments and benefits are non taxable? What if I incur expenses in relation to my job?

Generally, you must include in gross income everything you receive in payment for personal services. In addition to wages, salaries, commissions, fees, and tips, this includes other forms of compensation such as fringe benefits and stock options. You should receive a Form W-2, Wage and Tax Statement, from your employer showing the pay you received for your services. Childcare providers. If you provide child care, either in the child's home or in your home or other place of business, the pay you receive must be included in your income.

If you are not an employee, you are probably self-employed and must include payments for your services on Schedule C Form or SR , Profit or Loss From Business. You generally are not an employee unless you are subject to the will and control of the person who employs you as to what you are to do and how you are to do it.

If you babysit for relatives or neighborhood children, whether on a regular basis or only periodically, the rules for childcare providers apply to you. Fringe benefits you receive in connection with the performance of your services are included in your income as compensation unless you pay fair market value for them or they are specifically excluded by law.

Abstaining from the performance of services for example, under a covenant not to compete is treated as the performance of services for purposes of these rules. Recipient of fringe benefit. You are the recipient of a fringe benefit if you perform the services for which the fringe benefit is provided.

You are considered to be the recipient even if it is given to another person, such as a member of your family. An example is a car your employer gives to your spouse for services you perform. The car is considered to have been provided to you and not your spouse. You do not have to be an employee of the provider to be a recipient of a fringe benefit.

If you are a partner, director, or independent contractor, you can also be the recipient of a fringe benefit. Rents from personal property. If you rent out personal property, such as equipment or vehicles, how you report your income and expenses is generally determined by:.

Generally, if your primary purpose is income or profit and you are involved in the rental activity with continuity and regularity, your rental activity is a business. See Publication , Business Expenses , for details on deducting expenses for both business and not-for-profit activities. A partnership generally is not a taxable entity. The income, gains, losses, deductions, and credits of a partnership are passed through to the partners based on each partner's distributive share of these items.

For more information, refer to Publication Partner's distributive share. Your distributive share of partnership income, gains, losses, deductions, or credits generally is based on the partnership agreement. You must report your distributive share of these items on your return whether or not they actually are distributed to you.