Do UK citizens file for taxes?

I know every April, here in the US, Americans file for taxes to get out of paying some taxes because they have dependents, married, certain business expenses, etc. I was asking my bf and he said, he doesn't filing anything. And I read that only business owners in the UK file for taxes. How does it work? Does your employer just deduct taxes? Do you have no say what things you are paying for (i.e. student loans would mean paying less) so you just pay the same percent as everyone else?

Thanks!

In the UK, your taxes are taken out of your paycheck automatically every month and they should be correct, providing you are on the correct tax code for your salary - which means you don't have to file taxes in April.

If you think your tax code is wrong and you are paying too much/too little tax, you can just call up the Inland Revenue people and they should change your code and refund/take back the money in your next few paychecks (you may be asked to send them a letter and/or your P60 form - which is issued at the end of the tax year in April), so the only people who should need to file taxes here are those who are self-employed, people who have special circumstances etc.

Everyone has Income Tax and National Insurance contributions taken out of their pay, but the amount deducted for student loans, pension plans, etc. will depend on whether you have a loan/pension, how much you earned in that month and what percentage of your salary is due to be deducted for these.

if the Inland Revenue thinks you need to, they'll send you a self-assessment form (tax form). you can either fill it out by paper, online or use an accountant. 

From the 2008/09 tax year every US person in the UK who wishes to claim the remittance basis because they have even a dollars worth of non-remitted US income will be required to file a UK return as well under draft legislation published by HMRC last Friday. These returns are for the 2008/09 tax year, however, and the legislation has still to be considered by and approved by Parliament.

You file under three circumstances:

1) You owe the UK significant sums of money.  If you owe, you ought to pay, even if they haven't asked you formally to file.  They don't have a set figure for this, but a balance due of £100 is definitely enough to file.  I recommend my clients file if the balance due is £25 or more, for safety's sake.

2) The UK owes you a significant refund.  If they owe you, you ought to make a claim to get your money back, even if they have told you "you don't need to file".  There's no set figure for this either, but ideally your refund should exceed whatever you're paying someone to claim it for you.

3) They ask you to file.  If they send you a Self Assessment form, you must file, even if there is a zero balance due and a zero refund. 

Under the new remittance laws, there may be a requirement to file for all nondomciiled persons, which is pretty much everyone who reads this board.  We won't know until the laws are finalized, and this law won't apply until the 2008/9 UK tax year. 

I've never had to pay taxes before cause I never worked long enough to have to pay them. I'm going to graduate in June though and I'm terrified of them. I hardly understand US taxes, then including UK and I'm lost!

Hi Kimpy26,

I do agree, when you first see tax returns and all the mumbo jumbo figures and calculations you think holy moly!

but, once you start to look at the parts that apply to you it does get a little easier to understand!

As you say you're going to graduate in June, I'm going to assume (slightly riskily!) that your income will be less than £30K - If so, nip over to Taxcalc.com and buy their £4.99 tax calcuation product which has an easy to follow question answer type 'interview' format which makes things just that little bit easier! you'll still need to gather up any paper based records etc so you know what figures to input but basically, it's meant for people who've never really needed to understand taxes and may need to fill in returns.

I'm plugging them becuase I used to work on the development of the product when it was owned by Intuit - it got sold off and now is owned by another company based around the Reading area.

Lastly, even though 'most' people just let their employer do their 'taxes' as such - it's a good idea to use a product like Taxcalc to 'check' the figures you are actually paying! i'd estimate around 10-15% of the users of the product when I worked on it would find they were paying too much tax by way of mistakes made by their employer! and also, the Tax office by the government themselves have been known to make errors!

In the USA, there's a program called TurboTax - also made by Intuit, and also aimed at individuals who've never really given taxes much thought - have a look at that too in case you need to file in the USA as well.

hope the above helps a bit!
Cheers, DtM! West London & Slough UK!

Under the new remittance laws, there may be a requirement to file for all nondomciiled persons, which is pretty much everyone who reads this board.  We won't know until the laws are finalized, and this law won't apply until the 2008/9 UK tax year. 

And how do you mean "nondomiciled"?

Thanks so much! My mom uses turbotax. Just worried about having to pay both i guess, when I can't even understand one! 

"nondomiciled" for UK tax purposes has relevance as to whether or not your offshore (non-UK) income and assets are taxed.  A nondomiciled person is GENERALLY someone not born in the UK.  However, as with all tax concepts, it is way, way, way more complicated than that simple definition.  The vast majority of people posting in the US/UK tax forum are Americans living in Britian, most of whom are nondomiciled for UK income tax purposes.

As a UK citizen/national - I had to fill out a self-assessment for about 5 years. Not sure why they sent me it in the first place, may have been because, due to overtime etc my salary had edged me into the higher tax band, or maybe because I had cashed some shares in, or perhaps they just periodically dicide to send them out to check.

Anyway, the form is relatively straightforward....the first year I had overpaid about £30 tax! The seconed year I had underpaid £30! 
But the useful one was when I had taken voluntary redundancy, the pay off was tax free, and I wasn't working for 2 months.....they ended up having to pay me about £500 back 
The next 2 years were ok, and in the new job I was below the higher tax threshold so they wrote to me to say they would not be sending me the forms in future!