Why do people get taxed?

HM Revenue & Customs collects tax to pay for public services.

Each year the Chancellor’s Budget sets out how much it will cost to provide these services and how much tax is needed to pay for them.

What is income tax?

Income Tax is a percentage of your earnings that must be given to the government to pay for the goods and services that the government provides such as the NHS (health care), schools and roads.

You must pay income tax on:

• Earnings from employment
• Earnings from self-employment
• Most pensions income (state, company and personal pensions)
• Interest on most savings
• Income from shares (dividends)
• Rental income
• Income paid to you from a trust

There is no tax on training grants.

More...

Adding up to a lifetime has lots of useful, easy to understand interactive information on all the financial things you'll have to deal with in life. Check out their working life section for more information in income tax.