What are the Main Types of Taxes in the UK?
Introduction Taxation is a crucial component of any country's economic system, allowing governments to fund public services and infrastructure. In the United Kingdom, taxes play a vital role in financing various government initiatives. Understanding the main types of taxes is essential for individuals and businesses alike. This article explores the key categories of taxes imposed by the UK government. Income Tax Income tax is the primary form of direct taxation in the UK, levied on individuals based on their earnings. It is progressive, meaning that the tax rate increases as income rises. The income tax system consists of several tax bands, with each band subjected to a different tax rate. Currently, the tax bands in the UK are basic rate, higher rate, and additional rate. The income tax revenue is utilized to fund public services, welfare, and other government programs. National Insurance Contributions National Insurance contributions (NICs) are payments made by employees and e...