Amount earned before taxes owed?

Ya know how in America if you 'earn under a certain amount of money in a year' you actually do not pay taxes on it... ?

Is it the same here?

If so, (for a married person, filing separately, without children) what is that amount?

Many thanks!
L.

Yes, there is a minimum amount you need to earn. However, it has nothing to do with whether you are married or have dependents or anything... each person is given a Personal Allowance each year and the amount they can earn before paying tax is determined by their tax code.

The personal allowance is based on your age and your total income. There are 3 levels of personal allowance: Basic, Age 65-74 and Age 75 and over.

Most people will have the Basic personal allowance, which for the 2012/2013 tax year is £8,100 (tax code 810L), with an income limit of £100,000 (i.e. if you earn more than £100,000 you get less allowance). So, if you earn less than £8,100 in this tax year, you don't have to pay any tax, but if you earn more, then you pay tax on anything you earn above £8,100.

For people aged 65-74, the personal allowance is currently £10,500 and for Over 75 it's £10,660, both with income limit of £25,400.

If you end up paying too much tax, for example if you only work for part of the year and pay tax during that time, but overall your total income is less than the personal allowance, then you can claim a tax refund within a certain time limit.

See here for more info:
http://www.hmrc.gov.uk/incometax/codes-basics.htm
and:
http://www.hmrc.gov.uk/incometax/personal-allow.htm

Thanks Ksand24 - You are the BEST!!!

XOOXOX!!!

 

One caution - the personal allowance is not available to anyone who elects to pay UK tax on the remittance basis (as against reporting worldwide income and gains in the UK).

If there is no income outside the UK, this is not going to be relevant.

Oh, wait... Confused now.

I worked IN the UK, and ONLY in the UK.

So, this amount applies, or no?

I'm trying to figure out if I am going to owe taxes IN the UK when I file here!

What guya says only applies if you have foreign earned income to report.

If you will only be working in the UK then you will get the personal allowance. However you should only need to file UK taxes if you are either self-employed or meet other certain criteria. If you are an employee and pay tax through PAYE, then you shouldn't need to file taxes... It will normally be sorted out in your payslips through your tax code. I've been working in the UK for 15 years and have never needed to file taxes. The only member of my family who does file is my dad because he's self employed.

Edited because i'm on my phone and apparently can't type properly on it :p.

Second word of caution: the Personal Allowance is not based only on 'earned' income, but includes other income such as interest from a standard savings account (not an ISA), etc. Is there any other type of income from either inside or outside the UK? UK banks and building societies automatically withold 20% of interest earned on standard bank accounts for tax. If you will fall below the PA on total income, you can make a declaration to the bank to not withold the 20%.

Read carefully the advice from Guya, and determine whether you will pay tax on the remittance basis or the arising basis.

Hmmm... Nothing in the USA. Not even a bank account.

I worked some freelance gigs IN the UK, so I need to report the earnings.

I earned less than 5000 quid, freelance.

I'm trying to figure out if I will owe tax on it, and if so, about how much, so I can pay it. They deducted nothing from it.

I'm assuming something should go to NI, but I'm not sure how much...

I'm confused, and it is my first year here, and my first time filing - thank you for answering my annoying questions!

No UK tax, no NI, see
http://www.hmrc.gov.uk/working/intro/class2.htm
also Class 4 nothing there either.

[Not relevant to you because you're self employed, but possibly relevant for husband. It's interesting that ksand24 says he hasn't filed for 15 years because of PAYE deductions. I suggest everybody computes their UK tax every year and then decide whether to file if there's a reclaim or tax due. HMRC say that PAYE is not meant to be accurate.]

You didn't ask, but generally advisers say 'file in the US' even if there's no need if only to be able to prove later there was no need.  There are lots of other questions you could be asking, especially if your husband is not a USC. Maybe we need a UK-US check-list.

I am USC, and my hubby is UKC, and we are both self employed - HE totally owes taxes, every year.

And he pays them, which is good - LOL!

I will file for the USA, and I know I will not owe anything there.

Just... confused about HERE!

Thank you for responding!!!!!!!!

robnw, for the record, Ksand24 is a 'SHE' rather than a "he"! 

So, this is the part that applies to me, right?

If you have low earnings:
If you earn less than £5,595 per year you can apply for a Certificate of Small Earnings Exception and not pay Class 2 National Insurance contributions. However, you might decide to carry on paying them voluntarily to keep your entitlement to the State Pension and other benefits.


So, basically, if I earned UNDER £5,595 per year, I will not owe anything?