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Prescap Financial Advice for Understanding Tax

One of the major sources of funds for any government is the tax collected within its borders, and the UK is not an exception. The UK imposes different types of taxes on individuals and legal entities alike. It is therefore important to get acquainted with the tax system if you plan to work or invest here. Here is a brief on the different types of taxes.

Income tax is levied on earnings. Each individual under the age of 65 is eligible for tax allowance whose exact amount varies periodically. The taxes are classified by the source of earnings. Here are the main tax classes.

PAYE, usually expounded to Pay As You Earn, is collected from the working professionals such as nurses, teachers etc and the amount is usually submitted by the employer
   
Capital gains tax is levied on earnings from capital assets such as bonds and stocks as well as from real assets such as property, and the rate is dependent on the class of income
   
Corporation tax is levied on the profit that companies collect, and the rate is dependent on the amount of earnings. Small and medium companies can get tax reductions and rebates on special occasions.
   
Value added tax is applicable to the trade of all taxable goods and services which are locally produced and consumed, imported or exported
   
Excise duties are taxes levied on particular products such as mineral oils, alcohol, motor vehicles, tobacco and tobacco products etc. You can find the exhaustive list of the items that are subject to excise duty, and the specific amounts taxable per item on the government website
   
Motor taxes are a collection of taxes such as vehicle excise duty, various statutory fees, fuel duty, congestion charges and a host of other charges. If you have a motor vehicle or are planning on having one, it is important to know the taxes the government will collect from you
   
Stamp duty is levied on specified products and share transfers. The rate is usually 0.5%, which can be revised at any time. The duty is usually not imposed on transactions except on land and property transactions.
   
Inheritance taxes are levied on inheritance at varying rates based on the circumstances and the amount of inheritance. The two main ways of accessing an inheritance is either a death or a long time transfer, and these two attract differing rates

It is important to know that there are periodic changes to the current rates and allowances. This means that you need to keep abreast with the changes.

Tax Exceptions

There are several occasions that call for tax exceptions, reductions, rebates and refunds. These exceptions are based on a variety of circumstances. We’ll look at refunds as they cut across the board.

Tax refunds are usually given when the individual or legal entity in question has overpaid the tax and wish to recover the excess amounts. The government even pays you back the overpaid amount with interest!

When Should You Get a Tax Refund?

There are several occasions that can cause a tax overpayment which qualifies for a refund

 Every time someone gets employed, they are issued with a tax code that stipulates the amount they should pay in taxes. Therefore, if you or anyone paying taxes on your behalf uses the wrong code that leads to overpayments, you will be eligible for refunds
   
 When you start a new job, you may be taxed under an emergency tax code 
   
 If you are self employed and decide to pay your taxes a year in advance, you are eligible for refunds should you realize that the payment were a lot more than they ought to have been. This is especially so if the business has experienced a downturn and the consequent tax returns are lower than what you had paid.
   
 If your tax free allowances aren’t properly allocated and you are a pensioner with more than just one occupational pension, you may be paying too much tax. Go through your taxes and apply for refund should you find that you have overpaid.
   
 If you have more than one job, especially if you are a part-time student or a low-paid worker, each of your employers maybe submitting taxes at a basic rate which exempts you from benefiting from your tax-free personal allowances.
   
 You are also eligible for tax refund if you were born on or before April 6 1935 or you are in a civil partnership with a person born at that time
   
 Tax refunds are also given on inheritance, saving interests, PAYE and on pensions. To check if you are eligible for any of the refunds, it is important to check the government website for more information.

There are more than 30 ways to save on taxes. To save o your monthly expenses, check out where and how you can get taxes regally reduced from your bill.

Applying For a Tax Refund: Contact Numbers To Use

Before you make the application, it is important to verify whether you are eligible for one. You can always use the tax checker to know if and how much you qualify for. If you are wondering how to claim a tax refund, call the tax experts to guide you through the process.

It is also important to know that claiming a tax refund has a time limit, which is four tax years since the date of your overpayment. A tax year runs from 6th April to 5th April of the following year.

 

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