The Telegraph Tax Guide 2022

Your Complete Guide to the Tax Return for 2021/22

Jon Yarker

• Publisher: Kogan Page
• Year: 2022
• Print ISBN: 9781398608313
• eBook ISBN: 9781398608344
• Edition: 46
• Topic: Personal Development
• Subtopic: Taxation

The Telegraph Tax Guide is the UK's bestselling tax handbook, containing everything you need to know about completing a self-assessment tax return for the 2021/22 financial year. With advice on how to complete self-assessment tax returns and a number of tax saving tips, this indispensable book includes:
- Key changes from the Budget and Treasury Statements
- Dealing effectively with HR Revenue and Customs
- Worked illustrations showing you how to complete your tax submission
- How living or working abroad affects the tax that you pay
- Tax saving tips which help you save moneyWhether you are self-employed, work part time of full time, are unemployed or retired, if you pay tax The Telegraph Tax Guide is invaluable. It helps ensure that you are as tax efficient as possible, offering practical advice, timetables and examples that make the complex and challenging world of tax returns easier to understand.

05

Working in employment

Most of us have worked for somebody else at some stage in our lives either on a full-time or part-time basis.

Am I employed?

Generally speaking you are regarded as employed:

• if you work for the same organization from day to day; and
• you do not have the risks associated with the running of a business.

If the answer is ‘yes’ to most of the following questions then you will correctly have been categorized as having employee status.

• Do you have to do the work yourself?
• Can you be told where to work, when to work, how to work and what to do?
• Can you be moved from job to job?
• Do you have to work a set number of hours?
• Are you paid a regular wage or salary?
• Can you get additional pay for overtime and a bonus?
• Are you entitled to holiday pay and sickness pay when you are away from work unwell?
• Are you responsible for managing anyone else engaged by your employer?

Earnings

The earnings from an employment on which Income Tax is payable are:

• a salary or wage;
• a bonus;
• overtime;
• commission;
• tips or gratuities;
• holiday or sick pay;
• part-time earnings;
• director’s salary or fees; and
• benefits-in-kind.

The Pay As You Earn (PAYE) system

The mechanism for collecting the tax due on earnings from an employment is the PAYE system. It is the responsibility of employers to:

• deduct both Income Tax and National Insurance Contributions from the earnings of their employees; and
• pay the total deductions over to HMRC every month.

The PAYE deducted from an employee’s earnings is regarded as a credit against the total tax payable by the employee for that tax year. Each employee’s individual allowances and reliefs are taken into account by the employer in working out the amount of tax to deduct from the employee’s salary or wage. This is possible because HMRC issue all employers with a code number for each employee.

Code numbers

Every employee’s annual PAYE Coding Notice sets out:

• on the first lines, the total tax allowances due; and
• on the lines below, the amounts taken away from the allowances.

On...

Table of contents

• About the author
• Introduction
• 01 You and HMRC
• 02 Tax rates and allowances
• 03 Tax credits
• 04 Interest payments and other outgoings
• 05 Working in employment
• 06 Value Added Tax
• 07 Working for yourself
• 08 National Insurance and state benefits
• 09 State and private pensions
• 10 Savings and investment income
• 11 The family unit
• 12 Residence and domicile
• 13 Capital gains
• 14 How to complete your Tax Return and work out your tax
• 15 Paying your tax, interest and penalties
• 16 Elections and claims: time limits
• 17 Inheritance Tax
• 18 Budget measures
• Appendices
• Index