PAYE deductions

There are two types of deductions in the UK that apply to you - PAYE (Pay As You Earn) and NI (National Insurance).

PAYE

The UK tax year runs from 6 April to 5 April the following year.
The taxation thresholds for the 2009/10/11 Tax Years are as follows:

Taxable Bands Allowances	2009-10 (£)	2010-11 (£)
Standard single person’s annual personal allowance - Tax Free	First £6,475 earned over the year	First £6,475 earned over the year
Starting rate 10%	-	-
Basic rate 20%	0 to £37,400	0 - £37,400
Higher rate 40%	Over £37,400	over £37,400
Additional rate 50%	-	Over £150,000

To complete your tax return you must keep details of the following: 

• Copies of all your P45s - these are the tax certificates you get when you leave an employer. You may have more than one in a year (depending on the number of employers you worked for).
• Your P60 - this is the end of year tax certificate issued by your current employer (please note, you will only ever receive a P60 if you were in employment at the end of the tax year, otherwise your P45s will suffice).

National Insurance

National Insurance provides for unemployment and social security benefits, state pensions and the National Health Service (NHS). You are required by law to obtain a National Insurance number.
In addition to PAYE, National Insurance is automatically deducted from your gross wages. Please see the below table, which shows the contributions payable to the relevant earnings band.

Earning Limit	Employee's Contribution
£95 to £110 weekly, or £412 to £476 monthly	0%
£110.01 to £844 weekly, or £476.01 to £3,656 monthly	11%
Over £844 weekly, or over £3,656 monthly	1%