Taxable Income

The following are the most common forms of income taxable on UK residents. Bear in mind that the list is not exhaustive and may not include all items of taxable income. Some items may have certain conditions that apply to them:

Employment

Share schemes

Self-employment

Income, after deduction of allowable expenses, from self-employed trade, profession or vocation (including income from construction industry)

Partnership

Land & property

Rental income (minus allowable expenses) from

Foreign

Overseas income from:

Trusts

Income from trusts and settlements

Certain income from estates of deceased persons

Capital gains

Certain gains made on disposal of share holdings

Gains made on disposal of other capital assets (including property which is not your main residence)

Income from UK Savings & Investments

Pensions & Benefits

Other Income

Taxable Deductions

The following list contains the most common forms of allowable expenses for UK residents. The list is not exhaustive and may not include all allowable items. Some items may have certain conditions that apply to them:

General

Expenses incurred in doing your job (employment)

Land & Property

Allowable deductions from rental income include:

Benefits in Kind

Benefits in kind are assessable on the employee. They are reported at the end of each tax year on a form P11D.

In addition to income tax being due on all the benefits, Class 1A National Insurance Contributions (NICs) are due on the car and fuel benefits. The NICs are payable by the employer. With effect from 6th April 2000 NICs will also be due on the other benefits (e.g. private medical care, cheap loan etc). Again this will be payable by the employer.

Below are lists of benefits that are taxable on all employees, taxable on certain individuals and those that are not taxable. There are individual rules relating to each one:

Summary of benefits taxable on all employees

Unapproved share option schemes

Non cash vouchers

Living accommodation

PAYE due on non-cash items (eg cash voucher)

Summary of benefits taxable on employees earning over 8,500pa and directors

Company cars available for private use

Vans available for private use

Interest free and low interest loans (Applies to balances over 5,000)

Certain scholarships

Gift/loan of assets from employer

Private medical insurance

Summary of non-taxable benefits

Free or subsidised canteen meals if made available to all employees

Car parking spaces at or near work

Certain home to work travel expenses

Relocation packages up to 8,000

Certain workplace nurseries

Living accommodation in specific circumstances

Training courses

Christmas parties and similar functions within set monetary limits

Long service awards

Awards under staff suggestion schemes

Certain sports facilities

Pension provision