Taxable Income is the amount of income that is subject to tax. It is equal to salary minus Personal Allowance, but other tax allowances can also reduce it.
Taxable Income is the amount of income that is subject to taxation in the United Kingdom. It includes all types of income like salaries, bonuses, self-employment earnings etc.
In the UK, some income is exempt from taxation. This is due to the existence of Tax Allowances. Most taxpayers are entitled to a Personal Allowance in the UK. The standard Personal Allowance is £12,570 for the 2023/24 Tax Year. Income Tax only has to be paid on income above the individual's Personal Allowance. This is the Taxable Income of an individual. There are also other Tax Allowances that can reduce an individual's Taxable Income.
Tax is collected on a Taxable Income by HMRC in the UK. This is done by either automatically deducting tax from an Employee's salary through the PAYE system, or a Self-employed individual must complete a Self Assessment.
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