If your income is over a certain amount, you will have to pay Income Tax on it. Not all income is taxable, and there are allowances and reliefs you may be able to claim.
What do I have to pay income tax on?
Not all income counts towards Income Tax. You may have to pay tax on:
- earnings from employment or self-employment
- pensions, including State Pension, and annuities (except pensions under the War Pensions Scheme and Armed Forces Compensation Scheme)
- interest from savings accounts
- dividends from shares
- income from lettings
- some benefits, such as Carer’s Allowance and Statutory Sick Pay
- income from a trust.
Do I have to pay tax on all my income?
You do not have to pay tax on:
- Pension Credit
- Universal Credit
- Attendance Allowance
- Disability Living Allowance
- Personal Independence Payment
- Winter Fuel Payment
- pensions administered under the War Pensions Scheme and Armed Forces Compensation Scheme
- lottery or Premium Bond wins
- industrial injuries benefits
- Individual Savings Accounts (ISAs)
- some National Savings and Investments products.
How much income tax should I be paying?
We all have a personal tax-free allowance representing the amount of income you can receive before paying tax. This tax-free amount starts to reduce if your income exceeds £100,000. Some people are entitled to other tax-free allowances as well, such as Married Couple’s Allowance and Blind Person’s Allowance.
What should I do next?
Use the HMRC tax calculator
It’s important to check you’re paying the right amount of Income Tax. HMRC's tax calculator can help you check if you’re being incorrectly taxed.
Every year our Advice Service deals with thousands of calls from older people in need. Call us today to make sure that you are receiving all the help and support available to you.
Call freephone 0808 808 7575
8am – 7pm 365 days a year
A small favour
All the information and advice we provide on the website is free and completely independent, as is our Advice Line that is open 365 days a year.
But demand is going up. We are an ageing population and more people than ever are coming to us for support, which is why we need to ask for help.
If you are able to, just a small gift today could help us reach even more older people wherever the need is greatest.