This is a tax levied directly on the personal income of individuals. Individuals pay Income Tax on things like:
There are a few different rates of income tax in the UK, which are:
If you live in Scotland, then there a few more rates to know about.
Below is an example of how income tax is calculated if you earned £20,000 per year from a job.
£0 to £12,500 would be taxed at 0%, in other words tax-free because this is covered by something called a Personal Allowance.
The remaining income would be taxed at 20%; £12,501 to £20,000.
This would result in £1,500 of Income Tax due on £20,000 of earnings.
The current rates and bands can be found at gov.uk