Income tax encompasses tax that must be paid on certain types of income, including:
- money earned from employment as well as job-related benefits
- profits made from self-employment
- most pensions (eg state pensions and private pensions)
- rental income (with some exceptions for live-in landlords)
- income from trusts
There are certain types of income on which income tax does not need to be paid, including:
- any interest on savings that falls below the savings allowance
- the first £2,000 of dividends from company shares
- the first £1,000 of income from self-employment (a ‘trading allowance’)
- the first £1,000 of income from property you rent (unless you're renting under the government's Rent a Room Scheme)
For more information on income tax and the income tax rates, read Income tax.
Note that these rates only apply if you live in England or Wales. For more information, read Income tax in Scotland.