Everyone must pay taxes at some point or another – it can be a significant loss of money depending on your income. But why is it so important?
This article will help you to understand what taxes are, where your money goes and the importance of paying them.
What Are Taxes?
Taxes are set amounts of money that you pay directly to the government to fund services like education, health facilities and emergency services.
These are all integrated into a pool and divided by importance. During the pandemic, the majority of taxes went towards £330 billion in business loans to guarantee help for struggling businesses.
Taxes in Britain are split between a few main sections, including:
- Income tax: this is mainly paid once you make over £12,500 a year, which currently is just under how much someone on minimum wage working fulltime would make.
- Council tax: this is paid once you either own or rent a house. These have certain bands that determine how much you will be paying. The minimum a year is about £1,137 so just around £100 a month.
- Bedroom tax: bedroom tax can be paid when you move into a house where you have a vacant bedroom not being used.
- Consumption tax: this only applies if you are a business as the price is already fixed and added with the tax which is VAT.
- Corporation tax: this is a tax on the profits that your business makes.
As you can see, there are lots of taxes that we pay to live in Britain, so it is clear to see why people choose to find ways around having to pay it.
But people tend to forget: where does that tax money go?
Where Does My Money Go?
That tax money doesn’t just disappear. It is used to give back to the country.
Taxes are used for:
- Welfare system
- Emergency services
- HMP (prisons)
- Political system
- Criminal justice system
They are split by percentage from most to least important. It has taken years of perfection to get the tax system correct, despite it sometimes having flaws. It also adjusts to your income so you shouldn’t be left with small amounts to pay rent, bills, and food.
Britain is built on a tax system where our money gets recycled, so someday you could be handed money that was once yours a long time ago.
But why is it important to pay the taxes, mentally, and physically?
The Importance of Paying Taxes
Once you know where your taxes are going, it becomes easier to understand their importance.
Without taxes, our NHS would not be free, our education system wouldn’t be free, and criminals would not be able to be kept in prison.
Mentally, you are providing your money to help people. Taxes aren’t something purposely created for you to lose money. It’s created to give people the opportunities that you have been granted. It may not be something people enjoy but the cause that it is going towards is good.
However, you will end up in trouble for not paying taxes, and it can rack up to a significantly large amount. This can lead to prison or fines.
You are paying them to keep this country free and granting equality to all.
Read Now: How To Handle Your Debt in 2022
Taxes are annoying, sure, but you are providing food for a hungry family, or education to a refugee. You are giving back to this country, and despite not getting the recognition you deserve, you know full well in your heart that you have done this and helped in even the slightest manner.
If you have any further questions about financially related subjects then feel free to contact us here at Count today!