What is Income Tax and when do you start paying it?

Our mission is to make tax simple and save you stacks of cash! Income tax has been confusing UK taxpayers for years resulting in taxation panic and worry, but GoSimpleTax is here to make things easy.

Today, we’re going back to basics; we’re going to tell you what income tax is and what you need to pay tax on.

What is Income Tax?

Income tax is a tax levied directly on personal income. To put it simply, income tax is the tax on your earnings. Once your earnings go above your personal allowance you must pay tax on the following sources of income:

Income tax is a sad fact of life and if you receive income from any of the above sources you may need to file a self-assessment tax return. First off, find out for sure if you need to file a tax return by asking the GoSimpleTax wizard. It’s free, easy to use and takes less than a minute.

How Do I Pay Income Tax?

There are two ways you can pay UK income tax:

How Much is Income Tax?

Most people in the UK get a personal allowance of tax-free income. As of April 2018, you’re entitled to £11,500, even if you fall into one of the below income tax bands.

Income tax rates vary, and how much you pay depends on which of the income tax brackets you fall into:

Basic rate: tax is payable at the basic rate of 20% on taxable income up to £34,370

Higher rate: If your taxable income falls between £34,370 but is less than £150,000, tax is payable at the higher rate of 40%

Additional rate: If you have more than £150,000 you will have to pay an additional rate of 50%

Non-Taxable Income

On a brighter note, you will be relieved to hear that not all income is taxable. You don’t need to pay tax on:

  • Income from tax-exempt accounts, such as ISA’s
  • Working tax credit
  • Premium bonds
  • National savings certificates

With GoSimpleTax, you need not worry about income tax thresholds; we make it insanely easy to file your tax return.

Still unsure whether you need to file a self-assessment tax return, simply ask the GoSimpleTax wizard and you’ll get an instant answer.

Access GoSimpleTax and discover a simple way of filing your return (HMRC approved), know what expenses will help you lower your tax bill and keep all your records online, safe & sound. Ready to file with one click! Free means free. No hidden costs.

Need a GoSimpleTax Guide? Click here.

Need help preparing your tax return?

A UTR number is a 10-digit number completely unique to each and every UK taxpayer. Whether the taxpayer is to register for self-employment or is an individual or part of a partnership or company, a UTR number is needed to file a Self Assessment tax return online or via post.

self assessment software

How GoSimpleTax Works

self assessment software


Simply register for free with your full name and email address.

self assessment software


Select the income you receive and follow the hints and tips for potential tax savings.

self assessment software


Validate your personal information when you’re happy with the figures and submit directly to HMRC to get confirmation of your submission in just a few seconds.

"Affordable and easy to use tax return software."
James K.
Web Developer
"Excellent help for self-employed people with simple accounting needs."
Michael V.
Landscape Architect
"The process was so simple, I wondered if I'd got it right!"
Kenneth S.
Minister of Religion

Who Is GoSimpleTax for?

Sole Traders

With GoSimpleTax by your side, your tax duties as a sole trader are made easier than ever before.


Manage your HMRC tax return on assets and investments easily with GoSimpleTax.

Uber & Taxi Drivers

Our software makes the user journey for Uber and taxi drivers simple.

Ministers of Religion

Claim all tax exemptions available to Ministers of Religion and avoid being penalised for the avoidable.

Online Sellers

Usure about the tax return for eBay, Etsy, Gumtree, and Amazon sellers? GoSimpleTax has the answers.


Self-employed workers can spend more time generating income and less worrying about their tax return.


Let GoSimpleTax do the legwork for you while you focus on building your portfolio.


Stumbling over the tax return for overseas income? Let GoSimpleTax guide the way.