Gonna be a dumb question, but if I don't have a job and don't have any income do I have to worry about taxes?
Posted by True_Appearance_920@reddit | AskUK | View on Reddit | 85 comments
I turned 18 like 2 months back and have been searching for a job lately since college is nearly coming to an end, and just don't really know if I gotta worry about taxes since I don't have any income or anything. Just a bit worried about it.
CraigKing42@reddit
Well, without any income. You wouldn't be taxed income tax.
DaveSinghSwitch@reddit
So wait in America I have to do my own Taxes and my own Health Insurance. Wow that's nuts.
Careless-Giraffe-623@reddit
Yeah and apparently they hate free health care to... Strange people hahaha
AndrewHinds67@reddit
Only Republicans hate free healthcare.
spartacle@reddit
It’s not free. WE pay for it with our taxes, it’s free at the point of use which is a standout feature against other healthcare systems.
Worth nothing that Americans pay more per capita for healthcare than us yet they still have to get private insurance and copay and ALL issues that come with it.
AndrewHinds67@reddit
As has been said, I think you're watching too many American TV shows and films. The only tax you pay is VAT and associated taxes on things you buy and those taxes are included in the price. Also, council tax. If you are out of work then you don't have to worry about not paying income tax because your benefits are not a taxable income unless it's over £12570 a year which is the tax free allowance if you're working anyway. I expect I'll get downvotes if I'm slightly wrong about something but that's Reddit for you.
GoodTato@reddit
Even if you have a job you don't (usually) have to "worry" about taxes. They just come out of your wages.
Having to "do your taxes" as a normal person and not a business owner or anything is like, an American thing.
Nythern@reddit
Can't pay income tax without any income.
However, council tax might be something you may wish to contact the council about. If you live on your own or in a room/flat/house share, you may still be liable - but if you don't have any income I believe you can get an exemption.
looneylewis007@reddit
Whilst you are still in college you are exempt from council tax.
Nythern@reddit
But OP said college is coming to an end, so he should start thinking about council tax especially if he does land a job!
Jemima_puddledook678@reddit
Presumably they live at home, so no need to worry about council tax for a while yet.
Nythern@reddit
But they're now an adult and will soon no longer be a student. This means the household council tax bill will no longer disregard OP as a child/someone in full-time learning.
OP's parents (if they live at home) will have a higher bill, with costs potentially passed on to OP.
cougar0508@reddit
council tax is per household, so that would be their parents problem
mailywhale@reddit
No. Think you’ve been watching too many American films
SassySirennn@reddit
You pay tax if you don’t have a job in the US?! Wow
ActionBirbie@reddit
In the US they make you do your tax calculations yourself every year.
SpudFire@reddit
Imagine how many jobless accountants they'd have if they introduced PAYE
vishbar@reddit
You don’t have to do this if you have no earnings.
Enough_Response@reddit
The hilarious part is the government know how much you owe, but you still have to fill out the paperwork yourself.
MissionLet7301@reddit
You don't have to pay taxes, but you do have to fill out a tax return in the US, basically just saying "I had no income"
Over here you also have to do that but only if you're in a category that requires a self-assessment (e.g. self-employed).
mailywhale@reddit
What happens if you don’t ?
vishbar@reddit
Nothing, because the person you’re replying to is wrong.
reyadeyat@reddit
If you don't owe anything, the IRS doesn't actually care.
khan800@reddit
You don't need to fill out a federal tax return in the US if you make under $16K.
Still a good idea to fill one out, in case you get tax credits.
Tuna_Surprise@reddit
No
mailywhale@reddit
No, but I assume OP has watched things involving Americans filing their taxes every year and worried it was a thing here. We use PAYE (unless you’re self employed)
HighNimpact@reddit
There’s lots of kinds of tax in the UK, generally, no one really has to “worry” unless they have their own business (or they work in tax).
Income tax - if you worked an employed job, your employer pays this for you unless you earn a lot (over about £150,000).
VAT - you pay this on goods and services you pay for. Generally, it’s just included in the price and you won’t notice it. Sometimes, people like tradesmen or lawyers, charge an amount “plus VAT”. If you ask them then they can tell you how much it should be with the VAT.
Council tax - your council should send you a letter on this, you pay it to the council. They’ll explain the whole process and some people are exempt or have reductions.
Corporation tax is just for businesses.
Inheritance tax is just for if you inherit money or property when someone dies.
SDLT - this is a tax you pay when you buy a house. The amount depends on how many houses you own and how much the house costs.
SpeechWeird5267@reddit
(So far best response)
Queen_of_London@reddit
Is anyone not living in a council??
SpeechWeird5267@reddit
Hence others are disregarding that people pay council tax. The burden may change if one is unemployed but it is another tax people overlooked.
GrabbedByTheGhost@reddit
Our schools have failed you, sorry to hear you're even having to ask this.
No, but you should be on benefits if you have no income.
And then you should be looking for a job.
sophie_4006@reddit
Im 18, i have a part time job (i dont make more than £12k a year) and i don't get taxed on what i earn. Each hour i work is £12.71, (above miniuim wage, for my age group) and i work around 20 hours a week.
SaysPooh@reddit
Everytime you buy something it’s 20%vat, vat on fuel, fuel duty. Tax list is endless and at the end of the day the consumer pays it all
BlockBadger@reddit
Are you self employed earning over £1,000 a year? If no, you basically will only have to interact with HMRC when your job fucks up.
PumpyMcHangerson@reddit
No.
And when you are employed you don't need to worry, your employer gets your pay packet and then gives HMRC your tax out of it.
So if you contract is (for a poor example) £1000 a month, you will get about £800 in your hand and the tax is already done.
Sucks, but it is what it is.
C2BK@reddit
The first £12k-ish of income is free of income tax, and it's around the same for National Insurance, so someone earning £1,000 per month would not pay any income tax or national insurance at all, and they'd take home £1,000 per month minus e.g. union fees if they're paid via the employer.
PumpyMcHangerson@reddit
Yes and you failed to see 'for a poor example' in my brief explanation of taxes with simple numbers.
MissingScore777@reddit
To be clear it's not the first 12k (12,570). It's 12k annually per tax year.
So in April it's 1047, as that's the start of the year. Increase that by the same each month and apply it to your cumulative earnings. Tax is paid on the remainder minus what you've already paid in previous months.
C2BK@reddit
My wording was a summary of the actual situation.
Yes, it's not the case that don't pay any tax until you have earned over £12k-ish, how it works in practice is that you're given a tax code based on your yearly salary (as per PAYE reported by your employer) and tax deductions are based on that code.
HOWEVER, if your employer reports to the HMRC that you're only going to earn £12k, then you'll get a tax code that means you don't pay any tax.
If your employer isn't on the ball, you might get an emergency tax code, and end up temporarily paying too much income tax, but if that happens you'll get a refund and it's easy to resolve.
True_Appearance_920@reddit (OP)
Thanks for all the replies. Was just a bit worried about it since I never really got told about it. Thanks
boomanu@reddit
Understandable. As others said, even when you get a job you don't have to worry. Unless you own a business, you never have to think about tax, it just automatic. The us complicated a simple thing
Coconutpieplates@reddit
Nope, you're fine. This should be taught in schools though ffs.
bars_and_plates@reddit
I recommend sitting down for a couple of hours and learning how the various taxes work in the UK.
You are 18, you have your whole life ahead of you, you owe it to yourself to understand finances, they are the key to a good life.
If you don't learn it, someone else will use it against you. They probably already are.
No-Door-3181@reddit
You good lil bro
Snoo87743@reddit
No income tax no vat
Nineteen_AT5@reddit
Doesn't this show how our school system is failing our kids. This should be taught in school as well as other basics to prepare for adult life.
wittytittyyy@reddit
There’s a reason when you work the tax you pay is called income tax. Potentially to make it easier to understand..
Sensitive_Avocado_63@reddit
Why would you go to Reddit for this and not a simple google search? NO YOU DUMB FUCK.
Fun_Gas_7777@reddit
No....what would they tax you on?
Secret_Bluebird2357@reddit
I think they have just seen a lot of American media talking about tax season and not submitting taxes and assumed it was the same here.
Luckily we live in a first world country where you have to actively try to avoid paying tax to run into tax issues.
limpingdba@reddit
Council tax, car tax, VAT, fuel duty, beer duty, vape duty (or whatever that upcoming tax on vape juice is called)
Fun_Gas_7777@reddit
fair
SpamJavelin00@reddit
No- nothing to worry about . You don’t pay ANY tax until your income is higher than £12,575 per year . So if you earn less than that (or nothing at all, while job hunting ) you pay nothing . Don’t worry about silly questions I’m sure I asked far worse than that at your age
smaxxy@reddit
Yeah, you still have to pay tax. Who do you think pays for all this oxygen?! Think it just naturally occurs out of magic? Also, I hope you used a VPN because the govt watched websites like Reddit so they probably have your IP already and will likely audit you because of this post.
sold_groosser1KY@reddit
nah you're good, no income means no tax worries in the uk - personal allowance is £12,570 anyway so even a bit of side cash is usually tax-free unless you're raking it in
juanito_f90@reddit
Why would you be concerned about “taxes”? This isn’t America.
You pay tax if and when you earn through Pay As You Earn (PAYE).
It’s different if you’re self employed, though.
Spiritual_Tie3348@reddit
Simple things like this should be taught at school. Not everyone gets told about taxes, mortgages, pensions etc
LowarnFox@reddit
Do you live with your parents? If so you don't need to worry about council tax. If you live independently this may become an issue once you are no longer a full time student but you can get it covered via universal credit.
Otherwise you won't have to pay tax whilst unemployed unless you have a significant private income from somewhere.
Once you have a job, your employer will deal with it for you.
loveswimmingpools@reddit
Well in the UK we use the PAYE system where your employer takes any taxes out of your wages so employees dont have to worry about it. If you're not working you dont have to pay any taxes.
Dear_General1657@reddit
Except VAT
Euphoric-Wall-2576@reddit
and potentially Council Tax, depending on OP's situation and where they live.
Tall_Restaurant_1652@reddit
I'm assuming since they haven't long been 18 and are looking for a job they probably live with a parent / carer that deals with council tax anyway
dstordy@reddit
For most people tax will just be automatic PAYE and forget about it. Otherwise, the government has a simple guide of if you need to worry about self-assessment or not at https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return
Delicious-Resist-977@reddit
Council tax, car tax, or Anthrax.
Apsalar28@reddit
Very likely not.
Council tax is per household rather than per person, so if you're still living with parents it'll be their problem.
Income tax and national insurance for most people are handled by your employer when you have one and you only need to do anything yourself if you are self-employed or have another source of income like a rental property.
What is worth doing when you finish college is signing up for Universal Credit. Even if they won't pay you out anything it will get you National Insurance credits which count towards the number of years credit you need to get a full state pension. It's worth getting as many full years as possible on your record early so you're covered if you if you end up taking a few years out to go travel the world or be a stay to home partner later in life.
Mammoth-Turnip-3058@reddit
Once you get a job it will automatically be done as part of your wages, unless you become self employed then you do your own taxes or hire someone to do them for you.
Basic-Pudding-3627@reddit
If you have money in the bank that is earning interest and that interest is over a certain amount then you need to pay tax on that.
If you have money in investments such as shares then you need to pay Capital Gains Tax on profits.
If you earn dividends then you need to pay tax on returns above £500.
Scottie99@reddit
Is ‘like 2 months’, 2 months?
Smidday90@reddit
No we use PAYE so it’s deducted by your employer before you get paid and will be on your wage slips.
You know since you’re thinking about it it might be worth looking into tax, savings and investments and also pensions given you’re age you want to give yourself the best head start oh and go on Money Supermarket that has great financial advice.
itwasntme85@reddit
No tax without income.
alberoTranquillo@reddit
No, until you earn over £12,570 in a single year, you wont be taxed on income. Even then, it comes out of your paycheck automatically
Sorry-Programmer9826@reddit
For people with typical finances taxes just work automatically. Even if you had a regular job it would all be handled by your employer and you wouldn't need to do anything. If you aren't employed there is nothing that needs doing.
(If you owned a rental property, worked for yourself etc then you do have to do a bit of paper work)
Particular_Scar6269@reddit
No income, no tax to worry about
sbaldrick33@reddit
Not income tax, no. Your living situation might dictate whether you pay council tax, but I'm almost certain that you wouldn't be.
Additional-Guard-211@reddit
Most people pay PAYE (Pay As You Earn) and National Insurance. Any money you earn from work, will have automatically had your PAYE, NI (and for some) any other things like any Student Loans (not any other kind of loan) already deducted from your pay. So what you get is then yours to spend on your bills and life. There are some exceptions to this, like some people who work for an agency. This is really not something you need to worry about. Martin Lewis has some great videos on money. Fucks me off that this isn’t tought in schools!
srm79@reddit
No, you're okay. We pay tax on income and earnings here in the UK. There's also a fairly large tax allowance of around £12,500; that means you only pay income tax on any income over that amount. You will pay National Insurance on income over £240 per week. But, unless you're earning that, you don't pay anything.
If you can, it's worth claiming universal credit until you get work. That will satisfy your NI contribution for state pension (you need about 30 years of payments to claim your pension - it's not as far off as you may think, it's worth banking the years now) and they'll give you a bit of cash as well as some advice on how to get work.
On the whole, it's nothing to worry about. Unless you go self-employed you'll pay any income tax or NI through PAYE (Pay As You Earn) by your employer deducting it from your wages before you get them
welshdragoninlondon@reddit
Unless you self employed you don't have to worry about it. Tax will come automatically out of your payslip
quite_acceptable_man@reddit
Nope. When you have a job, you are on PAYE (Pay as You Earn). Your employer works out what tax is due and pays it to HMRC.
Self-employed people have to do this for themselves.
If you're not working, or not earning, then you don't have to do anything.
Perhaps you've been watching American TV or films where they talk about 'filing their taxes' before the deadline? It's a different system over there. They still have PAYE, but they still have to file a tax return every year.
TheUnSungHero7790@reddit
Don't be 100% sure if you have earnt money in the past.
Even on PAYE you may still get a dreaded letter from HMRC that you haven't paid required taxes.
AcademyBorg@reddit
Not you're fault, it's the education system for not teaching the basic shite like this.
Income tax comes straight out of your pay, if you don't have a job you won't pay it, National Insurance is also taken out of your pay, as is your pension.
They're other taxes, Council tax for example, that are dependent on other things, but you won't pay for them untill you need to. E.g when you start renting/have a house independently from your parents, you'll start paying council tax.
SushiRollFried@reddit
No, you only get taxed once you have a job and are earning money. Even then, its done automatically
SorryNotSorryMatey@reddit
Watch this guy if you want to be clued up about finance.
https://www.youtube.com/@DamienTalksMoney
L-0-T-H-0-S@reddit
You're taxed on income.
RumJackson@reddit
Are you declaring your pocket money to HMRC?
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