A quick word on tax
Whichever route of income you choose, at some point you will have to pay tax. As the saying goes, the only two certainties in life, are death and taxes!
Nobody likes or enjoys paying taxes, but we have to accept it is for the greater good, and make sure we pay our fair share.
Governments collect taxes from many different sources, and use the money to buy goods and services that benefit the wider community, and help run the country.
Most common taxes
Common taxes are, income tax on our earnings, national insurance payments on our earnings, (The Government might call them something different, like national insurance, but it’s still a tax), VAT on things we buy, companies pay corporation tax, business owners pay dividend tax, and possibly income tax as well.
These taxes, along with several others, are then used to pay for things like the education system, health and welfare system, social housing, emergency services, parks, libraries, waste disposal, recycling, defence, museums, along with many other services.
We don’t use them all personally, and may not need some of them for many years to come, if ever, but it is useful to know what our hard-earned money is used for, or at least what it should be used for!
I mentioned above that it is important that we pay our fair share of taxes, and this is only right. But we don’t have to pay anything more than our fair share, and we should certainly take advantage of any legal help with reducing our tax bills and liabilities, such as making full use of tax-free savings, like ISA’s, or using tax-efficient savings vehicles, like pensions, to their best effect.
Tax consideration fact
FACT: Tax avoidance (or mitigation) is perfectly legal. Tax evasion is not legal and will get you into serious trouble with HMRC.