Apr 23 2009
Should you be paying Income Tax?
Not all income is taxable - and you’re only taxed on income above a certain level. If your taxable income is more than your tax-free allowances you must contact HM Revenue & Customs (HMRC) if you’re not already paying tax. If it’s less than or equal to your allowances, you shouldn’t be paying tax and may be due a refund.
Working out whether you’re a taxpayer
To work out if you’re a taxpayer follow these three steps:
Step one - add up your taxable income
Some income is taxable and some is never taxed. To see if you’re a taxpayer, you first add up your taxable income in a tax year (6 April to 5 April) - you can ignore your non-taxable income. To view or print off a list of taxable and non-taxable income, follow the link below.
Step two - add up your tax free allowances
Tax-free allowances are amounts of income you can get without paying tax. They include the Personal Allowance and the Blind Person’s Allowance.
Blind Person’s Allowance
If you’re certified blind and are on a local authority register of blind persons, or if you live in Scotland or Northern Ireland and you are unable to perform any work for which eyesight is essential, you can claim Blind Person’s Allowance. If you’re married or in a civil partnership and can’t use all your allowance, you can give the unused part to your spouse or civil partner.
Even if you have no taxable income, it might still be worth claiming Blind Person’s Allowance as your spouse or civil partner could benefit from your allowance. The Blind Person’s Allowance for the tax year 2009-10 is £1,890.
Step three - work out if you’re a taxpayer
Take your tax-free allowances away from your taxable income. If there’s anything left, you count as a taxpayer and must contact HMRC if you’re not already paying tax. If there’s nothing left you shouldn’t be paying any tax and may be due a refund.
Taxpayer: worked example
You are 76 and registered blind. You’ve added up your taxable income and it comes to £19,000.
Non-taxpayer: worked example
You are 46 and have a part-time job. Your taxable income is £4,500.
Allowances that can reduce your tax
Bear in mind that even if you count as a taxpayer, you may qualify for certain ‘tax deductible’ allowances that can reduce your tax bill, or in some cases mean you have nothing to pay. Read the guide below to find out more.
