Talk:Income tax in the United Kingdom

incomes that are not taxable
In U K the following incomes are not taxable Interest from NSC, Savings Bank Account, up to 70 GBP for National Savings Bank, up to 4250 GBP against rental income

on and from 6.4.2006 up to 2,15,00 is exempted from income if it is deposited in pension scheme with a limit of 1.5 millon GBP for the whole life. Anything above is to be taxed @ 55%

No deduction from income is available for payment of Life Insurance Premium.

Deduction up to GBP 200000 is allowed provided the same is invested in enterprise company for a commitment period of 3 years All foreign remittances for income earned in other countries are taxable at the time of bringing the same in U K.

No tax is leviable up to 2150 GBP for all category of people.

I shall illistrate by an example.

Other examples are also invited.

--Ssunderagarwal 08:04, 4 April 2007 (UTC)

Bank Account / the gross interest variety
Regular Saver: 8% gross/AER fixed for 12 months. Invest a minimum of £25, maximum £250 pm.

High Interest Deposit Bond : 4.55% gross/AER fixed for two years

Online Saver Variable interest Online Saver. Interest of 4.65% gross, 4.75% AER paid monthly. Interest paid monthly £500+  3

AER: Annual Equivalent Rate: This is a notional rate which illustrates what the gross rate would be if interest were paid and compounded each year.

Sanjiv swarup 10:54, 4 April 2007 (UTC)

Example : Income minus Expenditure = Savings
Can we prepare a tax planning scenario for an individual who earns a salary of GBP 3000 pm. he needs to pay out rent, and has other expenses of GBP 2000 Sanjiv swarup 11:02, 4 April 2007 (UTC)

Income tax Personal allowance
2004-5 2005-6                    £4,745  £4,895 Tax bands 10% on earnings £4,746-£6,765  £4,896-£6,985 22% on earnings £6,766-£36,145  £6,986-37,295 40% on earnings   £36,146 +  £37,296+

The current £7,000 tax-free savings limit for Individual Savings Accounts (Isas) will be kept until 2010. Sanjiv swarup 11:03, 4 April 2007 (UTC)

Naming
If we keep this article, we should consider renaming the article to Income tax in the United Kingdom, since this is the format used by other countries. This could be done with a article move. Morphh  (talk) 14:12, 04 April 2007 (UTC)
 * your suggestion seems to have been actioned by Dhshah.

Suggest please dele this para Sanjiv swarup 14:29, 4 April 2007 (UTC)


 * I see you've tried to make the move - I think a lower case "tax" in the title would be just a bit better. Thanks Morphh   (talk) 16:16, 04 April 2007 (UTC)
 * Corrected. Morphh   (talk) 16:20, 04 April 2007 (UTC)


 * i will study the use of the case for the word "tax"

Sanjiv swarup 00:40, 5 April 2007 (UTC)

Restoration of Income Tax Act 1842
Merged the history of the legislation with the provisions more info is requested Sanjiv swarup 06:28, 4 April 2007 (UTC)


 * Seems like a good article now... It has sufficient information now. Kalivd 07:14, 4 April 2007 (UTC)


 * Sanjiv Swarup, the article you originally renamed (Income Tax Act 1842) was an article on that specific piece of legislation (ie, on what was passed in 1842), not on income tax today. I've restored Income Tax Act 1842 to its prior state, leaving you with this particular article as a general article on income tax in the UK. Winklethorpe 14:01, 5 April 2007 (UTC)


 * Your point is appreciated . Suggest deletion of this secion now. Sanjiv swarup 18:17, 5 April 2007 (UTC)


 * If you mean this section of the talk page, it's usual to leave talk pages as they are. If it gets too long, it can be archived. Winklethorpe 23:10, 6 April 2007 (UTC)

Justification splitting off from original

 * I don't think this article is necessary at the moment - there's very little material to justify splitting off from Taxation in the United Kingdom at the moment. If you look at Income tax in the United States for example, you'll see the difference in size and detail needed for a separate article. Do you feel you have enough material on UK income tax to write a full sized article? If not, it may be better to return to Taxation in the United Kingdom and work on the article there. Winklethorpe 14:01, 5 April 2007 (UTC)


 * Your guiding me towards Income tax in the United States is appreciated. Yes, several of my colleagues are working on making this article comparable; if not better. It is easier for others to help us in this endeavour if the article is independent. We would welcome a deadline to goad us into doing up this article in the fastest possible time. Sanjiv swarup 18:17, 5 April 2007 (UTC)


 * Please take a quick look at Talk_page_guidelines - it's best not to edit other people's talk page comments (You split my single comment up into two sections), even if, as in this case, you were trying to produce a clearer result.


 * On the split, I'll be happy to see a fully fledged article come out. On a deadline, feel free to set your own - no-one is in charge of you! If you haven't already, consider looking at the Manual of Style, which can be a big help in getting articles to the commonly accepted standard. Winklethorpe 23:26, 6 April 2007 (UTC)


 * a separate article would be good eventually, but do not agree a split is needed yet, as I said here. This is not the way to do it. The content here seems to be just data copied from the original Taxation in the United_Kingdom article.

I will undo this split again as the Consensus appears to be against a split.

I see my comment concerning this has not been replied too. GameKeeper 16:22, 9 April 2007 (UTC)


 * What I am attempting to add is fresh material. As explained earlier, I have added to the page relating to the history of the legislation. I have not split the page off from the TAXATION page.

There are lots of user friendly stuff and examples that I am working upon. Sanjiv swarup 17:27, 9 April 2007 (UTC)
 * You took the Income Tax Act 1842, which was not a history of income tax, but an article specifically on the Income Tax Act of 1842 and moved it then copied a lot of other data from other places in wikipedia, specifically the Income tax and Taxation in the United Kingdom articles. This is NOT adding information and makes the current information harder to maintain. The better way to start adding new material would be to expand the original article until enough information is present to require a split, as has already been suggested by other users. GameKeeper 17:39, 9 April 2007 (UTC)


 * If appropriate, the matter on the article page may be moved to the discussion page. Sanjiv swarup 00:44, 10 April 2007 (UTC)
 * I don't understand why you would want to do that? If you want to prevent the loss of this information when the split is undone you can make a special user page, say here User:Sanjiv swarup/Income tax in the United Kingdom and copy all the text in. This would be a suitable way to preserve the content. Hope that helps. If you agree to this, do you argee to me completely undoing the split? If you want I'll even copy the article text for you, indicate if you want me to do this please. GameKeeper 18:42, 10 April 2007 (UTC)
 * thnks : let me mull it over and let us hav some more views Sanjiv swarup 00:53, 14 April 2007 (UTC)
 * There has been no work on the article for 7 days, and no convincing explanation of why a separate article is warranted at this time. I believe the split should now be undone. Winklethorpe 21:00, 14 April 2007 (UTC)

External links not functional
This link is not functional. It gives an error that the page cannot be displayed. Ruzbehraja 05:09, 6 April 2007 (UTC)
 * The Creators of the Modern Income Tax


 * removed Sanjiv swarup 05:13, 6 April 2007 (UTC)

Pension Savings
Nowadays we're living longer, so we need more money than previous generations once did.

That's why many people choose to enhance their State entitlement through a scheme set up by their employer, or with a personal pension. The money is invested by their pension provider on their behalf with the aim of building up a more substantial sum for retirement.

Tax advantages: For every £1 you put in, the Government adds 22p (for the 2006/07 tax year) for basic–rate taxpayers. Higher-rate taxpayers can also re-claim an additional 18p (for every £1) via their tax return. If you're offered a company scheme you may be able to benefit from your employer's payments.

Pensions invest in different types of investments, including investments based on stocks and shares, which carry different levels of risk. The value of your investment can fall as well as rise and you may get back less then you pay in.

If you have a personal pension but stop paying into it, you could actually lose much of whatever you've already paid. For example by stopping paying into your fund, the charges may reduce your fund, meaning you could lose out when you retire.


 * Simple Steps to Starting a Pension Account
 * You decide to save for retirement with a personal pension plan
 * You choose a provider, type of pension and the age you would like to retire at.
 * You begin making payments: These payments, up to 100% of your relevant UK earnings, will receive tax relief, normally at your highest rate.
 * You retire at your selected pension age:The minimum retirement age is 50, but this will increase to 55 from April 2010.
 * You begin taking your income

Points to note:
 * If your income goes up, you may be able to pay more into your pension.
 * If you want to leave your pension provider, you can, but the transferred fund amount may be less than the amount you have paid in.

Source: Liberty Accounts

Ruzbehraja 11:39, 8 April 2007 (UTC)


 * Dear Ruzbehraja,

please check your findings with this source.... HM Revenue & Customs: Pensions Tax Simplification You will get tax relief on contributions up to 100% of your annual earnings (up to an annual allowance set at £215000). So if you put £100 into your pension ... www.hmrc.gov.uk/PENSIONSCHEMES/pts.htm

UK Income Tax Calculator ... uk.biz.yahoo.com/tax/calculators/home.html

A to Z - State Pension Your working life is counted from the start of the tax year in which you reach the age of.. www.thepensionservice.gov.uk/atoz/atozdetailed/retirement.asp

Pensions and retirement : Directgov - financial planning www.direct.gov.uk/en/MoneyTaxAndBenefits/PensionsAndRetirement/index.htm

Sanjiv swarup 11:57, 8 April 2007 (UTC)

Income Tax Allowances / please help in editing this
Income Tax Allowances The Chancellor announces the rates of allowances at the Pre-Budget Report which precedes the start of the tax year to which they relate. Generally speaking, Pre-Budget Report takes place in November or December.

Income Tax Allowances table Income tax allowances 2006-07 (£) 2007-08 (£) Personal allowance 5,035 5,225 Personal allowance for people aged 65-74 (1) 7,280 7,550 Personal allowance for people aged 75 and over (1) 7,420 7,690 Married couple's allowance (born before 6th April 1935 but aged under 75) (1) (2) 6,065 6,285 Married couple's allowance - aged 75 and over (1) (2) 6,135 6,365 Income limit for age-related allowances 20,100 20,900 Minimum amount of married couple's allowance 2,350 2,440 Blind person's allowance 1,660 1,730

(1) - These allowances reduce where the income is above the income limit by £1 for every £2 of income above the limit. They will never be less than the basic Personal allowance or minimum amount of Married Couple’s allowance.

(2) - Tax relief for the Married Couple's allowance is given at the rate of 10 per cent.

( http://www.hmrc.gov.uk/rates/it.htm ) Sanjiv swarup 03:32, 9 April 2007 (UTC)

various chapters to be discussed
Capital Gains Corporation Tax Exchange Rates Income Tax Inheritance Tax Interest Rates National Insurance Pensions Savings Stamp Duty Land Tax Tax Credits/Child Benefit Ref: the vertical column from http://www.hmrc.gov.uk/rates/cgt.htm Sanjiv swarup 03:36, 9 April 2007 (UTC)
 * Very few of those are actually income tax related. Winklethorpe 07:02, 9 April 2007 (UTC)
 * All these subjects are from url = http://www.hmrc.gov.uk/rates/cgt.htm
 * This is a Govt. of UK site. Please guide.
 * Sanjiv swarup 17:15, 9 April 2007 (UTC)
 * Yes, that is the site for HMRC, the UK government department responsible for the majority of UK taxes. However, the list above includes various taxes. Capital gains has relevance for an income tax article, and pensions and savings will also have some relevance, but the rest do not. If, as it seems, you do not understand the distinctions between these different forms of taxation, you've got some serious background research to do before you can make any headway on this particular article. Winklethorpe 18:30, 9 April 2007 (UTC)

Case Study
For a layman, this article would be really very complex to understand and gain any knowledge, without a practical example to support it. I think we should have some practicle problems also on certain topics, and also ask fellow wikipedians to solve them and help share knowledge and view points of others.

Heres a case study for which help would be required on Income Tax, to ascertain, the best possible tax saving measure(s). Let me explain.
 * A person has a fixed monthly income of £2000.
 * Out of that 1/3rd he spends on various household and personal expenses.
 * At the end of every year, he gets a bonus of £25000, of which 1/3rd he spends on buying a TV set and vacation trip and 1/3rd he saves up.

Now my question is, What would be the most efficient tax saving plans, he should subscribe to, to gain the maximum?

It may include
 * Pension schemes, since he would have to think about his future and old age,
 * Health Insurance, since health is wealth and it is a primary concern,
 * He also needs to maintain some liquid funds in his bank a/c due to any emergency or immediate requirement.

So all you tax gurus out there, what would you recommend?

The table below illustrates a skeleton structure of the case study.

Ruzbehraja 05:39, 10 April 2007 (UTC)

To aid this problem, i have also got a graphical representation of the case study. Do consult it and provide information.



Ruzbehraja 14:48, 10 April 2007 (UTC)


 * While examples are indeed a good way of illustrating facts, the actual facts need to be in the article first, properly referenced and well presented. The example you propose above is for tax planning, which while it has a relationship to income tax, is a different topic. You appear to be trying to offer advice to readers, rather than inform them of the facts behind the subject. Winklethorpe 06:42, 10 April 2007 (UTC)


 * I thought that since I am not a tax person and a layman, if I would have approached this page, I would not have understood practically, hence i thought that if a practical real life example could be taken up, then it would be better. I would not be able to offer advice since I am not a genius, and hence resort to wikipedias plethora of knowledge. Do guide me as to where this article should be / do the needful please. Ruzbehraja 07:02, 10 April 2007 (UTC)
 * My issue was not with the use of the example, but with the example being aimed at tax planning, rather than income tax specifically. If you wish guidance as to where I feel the article should be going, my advice would be to research and present the basic facts on income tax in the UK. Look at how other articles are set out, and what sort of content they have. Read Introduction_2 and follow the links to find how good articles are written. Winklethorpe 11:38, 10 April 2007 (UTC)
 * Please allow the example to stay here at the discussion page.

To solve the example, contributors like me will need to present facts in the main article Sanjiv swarup 14:18, 10 April 2007 (UTC)


 * Thank you, Ruzbehraja for a good illustration. Now the ball is upon the contributors like us

to talk about the provisions of the income tax act. Sanjiv swarup 16:22, 10 April 2007 (UTC)
 * This example is barely related to income tax and not related in any special way to the UK beyond the use of the use of the £ symbol.
 * Wikipedia is_not a publisher of original thought
 * Wikipedia is not a blog, webspace provider, or social networking site
 * Wikipedia is not an indiscriminate collection of information
 * I urge you to read and understand a bit more about what wikipedia is and is not before adding this inappropriate content. GameKeeper 18:29, 10 April 2007 (UTC)
 * As a user of wikipedia for over 3 years, I have seen it grow into a credible encyclopedia.

I would encourage users like Ruzbeh, because it chalenges contributors to PROVIDE the information that he is asking for. I know because a layman did look at the article on wikipedia, and came out with his doubts UNANSWERED. The point of the wikipedia is to elucidate. Let us do it. Sanjiv swarup 13:11, 11 April 2007 (UTC)