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What is income tax? πŸ’Έ

what is income tax

What is income tax? –

Introduction πŸ‘‹

Income tax is money that people have to pay to the government.

Disclaimer: This website provides information for guidance and educational purposes only. The Grown-Up School does not provide regulated financial advice. You can seek independent financial advice from a suitably qualified and regulated professional advisor. Check out our disclaimer policy for more information.

When you make money, you have to pay part of the money you make to the government. There are lots of different rules about how much money you need to pay.

If you don’t pay your tax on time, you could get fined and have to pay more money. The government will usually help you to pay your tax.

People have to pay income tax on money they make from things like:

  • Their jobs
  • Renting out their house
  • Selling things online
  • Having a savings account
  • Owning their own business

In really extreme situations where you don’t pay your tax, the government might do things like:

  • Taking your possessions and selling them
  • Take money from your bank account to pay what you owe
  • Take you to court
  • Close down your business

It is really important to understand the tax rules for where you live/work, so make sure to check your government website to find out what they are!

UK Tax Rules

https://www.gov.uk/income-tax

Did you know? – Income tax was invented to pay for a war πŸͺ–

Income tax was introduced in the UK in 1799 to help pay for equipment and weapons in the French Revolutionary War!

Nowadays it usually pays for a lot nicer things – like schools, fire, police services, and in the UK it helps pay for the National Health Service.

You can learn more about income tax on these websites –

Money Saving Expert Income Tax Calculator:

https://www.moneysavingexpert.com/tax-calculator/

Wikipedia:

https://en.wikipedia.org/wiki/Income_tax

Investopedia:

https://www.investopedia.com/terms/i/incometax.asp

Conclusion πŸ‘

So that’s it!

Hopefully you’re feeling more confident about understanding income tax.

If you know any friends or family members who might benefit from learning about income tax, share this post with them!

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