Income Tax and National Insurance: deducted from income, linked to state benefits and pensions.  VAT (Value Added Tax): tax on goods and services.  Corporation Tax: paid by businesses, based on their profits.

Income Tax is paid on income from employment or self-employment. Employers deduct Income Tax from wages using PAYE (Pay as You Earn).  Self-employed individuals file a Self Assessment tax return to report income and pay tax directly.

You pay National Insurance contributions to qualify for certain benefits and the State Pension. Both employees and employers contribute. Children under the age of 16 do not pay National Insurance.

Gross Pay is your income before deductions, for example Income Tax and National Insurance.  Net Pay is your income after deductions.

PAYE is the HMRC system that your employer uses to collect Income Tax and National Insurance contributions.  The tax code on your payslip tells an employer how much tax to deduct.

There’s no age limit. Tax applies if income exceeds the Personal Allowance.

Students working while studying will pay Income Tax and National Insurance if they exceed the income thresholds for these taxes.

Each tax year you’re allowed to earn a certain amount of money without having to pay tax. This is called a Personal Allowance, and HMRC will tell you what this is with a tax code. Your employer will use this code to work out the tax you may need to pay on your income.

By downloading the HMRC app you can find out what your tax code means and its impact on your pay. You can also view and save your National Insurance number and update information such as your address.

Self Assessment is how self-employed workers pay tax on their income. You declare your income by completing a tax return and then pay any tax owed. The deadline to complete a tax return for the last tax year is 31 January. You may be required to complete a Self Assessment for other tax purposes, for example people and businesses with other income.

If you are just selling some unwanted items that you have at home, it is unlikely that you will have to pay tax. In order to pay tax on the goods or services you sell, you either have to be trading or be making what is called a capital gain. If you are trading and your income from the trading is above a certain amount, you must register as self-employed and file a Self Assessment tax return.

You can earn up to the limit set by the trading allowance for occasional casual work such as babysitting. Income above that must be declared, and you’ll need to register as self-employed.

If your income exceeds the trading allowance threshold, you must register as self-employed and file a Self Assessment tax return.

Interest earned on savings may be taxed. Interest is the money a bank pays you, calculated as a percentage of the amount you pay in, for holding your money in your account. The Personal Savings Allowance (PSA) lets you earn some interest on your savings tax-free. The amount of tax-free allowance you receive depends on the rate of tax you pay.

HMRC is here to collect the tax that pays for the UK’s public services. We’ll help you meet your tax responsibilities and make sure you get any benefits, tax credits, refunds or other support you can claim. However, HMRC will take firm action against the small minority who bend or break the law.