R
Rob Z
A question elsewhere on this forum about write-offs for vehicle insurance made me wonder about the taxing situation in the UK. Here are a few questions for my British friends to comment upon:
1. Does everyone in the UK (England, Scotland, Wales, etc) use and pay taxes on the same tax return to HM Taxing authority, or is there a separate return and tax structure for someone, for example, in Scotland vs someone in Wales?
2. Is the VAT tax that I see mentioned on all products throughout the UK? Do you have to add it to your bills to clients for work you do in their house? My friends in Canada tell me that because their two add-on taxes (one is called GST I think) are so high they are under frequent and constant pressure by customers to do jobs off the books so they (the customer) can avoid these add-on taxes. This sounds attractive for the contractor but of course it is hard to hide a huge volume of work from the taxing authorities.
3. Comparison of total magnitude of taxes in UK and the US...I realize this is hard to do without extensive analysis, and I am only wondering in general terms. My wife is a teacher and I am a small business owner, so our personal income isn't terribly high compared to many other taxpayers. We end up paying about 25% of our gross income to the Feds (after all adjustments for deductions and so forth), 7.65% for social security tax, and about 5% to the state of Virginia. On the local level, personal property such as cars are taxed at ~4.2% of assessed value, and out house property taxes work out to ~1% of assessed value. Virtually all purchases in stores have a 5% sales tax which goes to the local county and the state. There are other taxes on utility bills, cell phones, etc, but the big ones are the ones that I mentioned above.
Other states have drastically different rates for their local taxes. I think Virginia is about in the middle of the pack as far as that goes.
So anyway, I'm just curious to see how things are in the UK. Any comments will be welcome.
1. Does everyone in the UK (England, Scotland, Wales, etc) use and pay taxes on the same tax return to HM Taxing authority, or is there a separate return and tax structure for someone, for example, in Scotland vs someone in Wales?
2. Is the VAT tax that I see mentioned on all products throughout the UK? Do you have to add it to your bills to clients for work you do in their house? My friends in Canada tell me that because their two add-on taxes (one is called GST I think) are so high they are under frequent and constant pressure by customers to do jobs off the books so they (the customer) can avoid these add-on taxes. This sounds attractive for the contractor but of course it is hard to hide a huge volume of work from the taxing authorities.
3. Comparison of total magnitude of taxes in UK and the US...I realize this is hard to do without extensive analysis, and I am only wondering in general terms. My wife is a teacher and I am a small business owner, so our personal income isn't terribly high compared to many other taxpayers. We end up paying about 25% of our gross income to the Feds (after all adjustments for deductions and so forth), 7.65% for social security tax, and about 5% to the state of Virginia. On the local level, personal property such as cars are taxed at ~4.2% of assessed value, and out house property taxes work out to ~1% of assessed value. Virtually all purchases in stores have a 5% sales tax which goes to the local county and the state. There are other taxes on utility bills, cell phones, etc, but the big ones are the ones that I mentioned above.
Other states have drastically different rates for their local taxes. I think Virginia is about in the middle of the pack as far as that goes.
So anyway, I'm just curious to see how things are in the UK. Any comments will be welcome.
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