How Many Taxpayers in the UK?
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The UK is no different from any other country regarding taxes. Everyone who works and earns a certain amount must pay taxes.
Knowing how many taxpayers there are in the UK is essential to understanding the country’s taxation system.
This article will answer how many taxpayers there are in the UK and include sections on income tax bills, determining if you are a taxpayer, and taxes for American expats.
How many taxpayers are in the UK?
According to HM Revenue & Customs, 32.2 million income taxpayers are currently in the UK. Of those 32.2 million taxpayers, around 4.13 million are higher-rate taxpayers who make over £150,000 per year.
HMRC also reported that the total income tax collected in the UK for the tax year ending April 5, 2020, was £191 billion.
How to know if you’re a UK taxpayer
If you are a resident of the UK, you will be classified as a taxpayer. This applies to British citizens and those who are not British citizens but are living in the UK.
To determine if you are a taxpayer in the UK, you must look at your total income and determine if it is above the personal allowance threshold. This is currently £12,570 for the tax year 2022/2023, and if your total income is above this amount, you will be classified as a taxpayer and will be required to pay taxes.
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Taxes to pay as an American expat
It’s suggested that there are almost 200,000 US citizens living in the United Kingdom.
The US has a citizenship-based taxation system, which means that US citizens are required to pay taxes on their worldwide income, regardless of where they live. If you are an American expat living and working in the UK, you may be required to pay US and UK taxes. You will also be required to pay the same taxes as any other UK resident, such as income tax, capital gains tax, and inheritance tax.
However, certain US and UK tax treaties can help prevent double taxation. If you are an American expat living in the UK, consulting with a tax professional is important to ensure you meet all your tax obligations.
Register as an expat taxpayer in the UK
If you are an expat living in the UK and employed, your employer will deduct tax from your income. But if you’re self-employed or have other UK/foreign income, you must complete a Self Assessment tax return.
Determine residency status for tax purposes in the UK
To be considered a UK resident for tax purposes, you must meet either the automatic UK test or the sufficient ties test. The criteria are as follows:
- If you spend 183 days or more in the UK in a tax year,
- Have your only home in the UK for 91 days, with at least 30 days of the year spent there.
- Work full-time in the UK for 365 days, with at least one day in the tax year.
- Other connections, such as employment or family, may be considered.
Who is tax-exempt in the UK?
Not everyone in the UK is required to pay taxes. You may be exempt from paying taxes if you:
- Earn less than the personal allowance threshold (£12,570 for the 2022/2023 tax year).
- Are under the age of 16.
- Are living and working abroad and meet specific criteria.
- Are registered blind.
- Are a member of certain religious groups and have taken a vow of poverty.
It’s important to note that even if you are exempt from paying taxes, you may still be required to file a tax return.
How is the number of taxpayers determined?
HM Revenue and Customs (HMRC) determines the number of taxpayers in the UK based on the number of people who have to complete a tax return. HMRC also uses information from employers, pension providers, banks, and other sources to identify people who may be liable for tax.
Who is considered a taxpayer in the UK?
Anyone who is a UK resident with an income or profit above the personal allowance threshold is considered a taxpayer in the UK. This applies to British citizens and those who are not British citizens but are living in the UK.
What types of taxes do American expats need to pay in the UK?
American expats living in the UK must pay the same taxes as any other UK resident, such as income tax, capital gains tax, and inheritance tax. They may also pay taxes on any income earned in the US.
How do I file my taxes in the UK as an expat?
Your employer will deduct tax from your income if you’re employed in the UK and an expat. If you’re self-employed or have other earnings from abroad, you must complete an annual self-assessment form and submit it to HMRC. You can do this either online or by mail.
Do I need to pay taxes in the UK if I am an expat?
Yes, if you are an expat living in the UK, you must pay taxes in the UK. This means that your UK income and any income you have earned in the US must be declared, and you may pay taxes on both if no tax treaties apply.
When is the deadline for filing taxes in the UK for the tax year 2023 as an expat?
For paper applications, the deadline for filing taxes for the tax year 2023 as an expat is October 31, 2023. For online applications, the deadline is January 31, 2024.
Are any tax reliefs or exemptions available for expats in the UK for the tax year 2023?
Yes, various tax reliefs and exemptions are available for expats in the UK for the tax year 2023. These include personal allowances, married couple allowances, and foreign-earned income exemptions.
The information provided herein is for general informational purposes only and should not be considered professional advice. While we aim to provide helpful and accurate information, we make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained here or linked to from this material.
Always get professional advice from a US international tax specialist.
Knowing how many taxpayers there are in the UK is important to understanding the country’s tax system.
Determining if you are a taxpayer in the UK can be confusing, but you must pay taxes if you earn more than the personal allowance threshold. Certain groups of individuals are exempt from paying taxes, but even if you are exempt, you may still be required to file a tax return.
For American expats living and working in the UK, there may be additional tax obligations to consider. It’s important to consult with a tax professional to ensure you meet all your tax obligations.
We offer professional, tailored tax advice. Contact us for more information.
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