Income tax is a tax paid on income. It is paid by employees and people who are self-employed and may also be payable by people who are not working but who have an income, such as people receiving retirement pension or an occupational pension. Not all types of income are taxable and it will seldom be the case that all of a person's income is taxed. There is no minimum age at which a person becomes liable to pay income tax. What matters is a person's income. If this is below a certain level, no tax is payable.
Everyone is entitled to a basic personal tax allowance. In addition, people may be entitled to other allowances on top of the basic allowance. This means that some of the person's income, which would otherwise be taxable, will be tax free.
Tax allowances are announced in the Budget each year. If the taxpayer is an employee and so is taxed under Pay As You Earn (PAYE), her/his personal allowance(s) will be spread throughout the year, so that each week or month a taxpayer will be left with a certain amount of tax free income after the tax has been deducted. If the taxpayer is self-employed or has an income but is not working, her/his personal allowance(s) will be taken into account when the Inland Revenue assesses her/his tax liability each year.
The Inland Revenue, South Wales Area issues Tax Code authorities regularly for the Salaries Office to implement. However, the Salaries Office is unable to advise on the reasoning behind a particular tax code and the employee is advised to contact Inland Revenue directly on 0845 714 3143.