In the UK, the income that individuals receive from work is taxed, and the funds raised contribute to annual government spending.
This section will outline what the main kinds of tax are, identify who must pay them, and explain the various types of financial help that are available from the British government.
The Welfare State and taxation
The UK operates a generous scheme of welfare payments and benefits to help those who need support. Those who are earning pay tax on their income, which contributes to the state fund for individuals and families who do not earn enough to maintain an acceptable standard of living.
Is there a welfare system in the UK?
Yes. Welfare payments may supplement existing income or represent an income themselves. Different types of welfare payment include help for those without a job, including Job Seekers’ Allowance and Income Support, help for those with children, such as Child Benefit, and contributions to people who are disabled or sick, which may come in the form of Disability Living Allowance or Working Tax Credit.
How do I apply for financial help from the British government?
The welfare state extends far beyond the brief examples listed above, so to make an enquiry and find out how to apply for your benefits, call the Benefit Enquiry Line on 0800 88 22 00.
What kinds of taxes exist in the UK?
Just as there are a number of benefits available in the UK, there is a range of taxes that apply to the incomes of British citizens. The main two types are Income Tax and National Insurance, which are normally deducted automatically by your employer through PAYE (Pay As You Earn).
Other taxes, such as Corporation Tax, apply to businesses. To see what level of tax you will pay on your income, see ‘Tax Thresholds’.