Answers · UK Tax · Payroll · VAT · Pensions

Plain-English explainers

UK payroll, PAYE, VAT, pensions, and Self Assessment topics — every claim cited against gov.uk and legislation.gov.uk.

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Self Assessment·18 July 2026·3 min read

How Do I Make a Payslip If I Am Self-Employed or a Sole Trader?

A sole trader does not get a payslip, because a payslip is an employer document under Employment Rights Act 1996 s.8 and you are not your own employee. You evidence self-employed income with the SA302 and Tax Year Overview instead.

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Mortgage·18 July 2026·3 min read

How Many Payslips Do I Need for a UK Mortgage Application?

Most UK lenders ask for the last three months of payslips, plus your latest P60. Lenders vary, so check the specific requirement, and four-weekly or weekly pay changes the count.

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Document compliance·18 July 2026·3 min read

Can I Make a Backdated or Previous-Month Payslip?

Yes, but only to reconstruct a genuine past pay record from figures that were actually paid, such as a lost payslip. Inventing pay you never received is fraud, and lenders verify every figure against HMRC.

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Document compliance·18 July 2026·3 min read

What Is the Difference Between a Payslip and a Salary Statement?

A payslip is the employer's statutory document under Employment Rights Act 1996 s.8, showing live PAYE and NI deductions. A salary statement (or salary slip) is a manual pay summary you enter and control, with no automatic deductions.

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Self Assessment·18 July 2026·3 min read

How Do I Show Proof of Income Without a Payslip?

Without payslips, UK income is proven with the HMRC SA302 and Tax Year Overview, bank statements, an accountant's letter, and signed contracts. Lenders and landlords accept these for self-employed and irregular income.

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PAYE·18 July 2026·3 min read

Do Agency, Umbrella, or Zero-Hours Workers Get a Payslip?

Yes. Since April 2019, Employment Rights Act 1996 s.8 covers all workers, not just employees, so agency, umbrella, and zero-hours staff are all entitled to an itemised payslip, and it must show hours where pay varies.

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Self Assessment·18 July 2026·3 min read

How Do I Write a Rent Receipt That HMRC Will Accept?

A rent receipt HMRC accepts for property-income records shows the date, tenant, landlord, property address, rental period, amount, payment method, and a signature. Keep them to support the property pages of your Self Assessment return.

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VAT·18 July 2026·4 min read

Which Goods Qualify for the India-UK CETA Preferential Tariff?

Under the India-UK CETA (in force 15 July 2026), a preferential tariff applies only to originating goods: those wholly obtained in the UK or India, or sufficiently transformed under the product-specific rules. Eligibility is proven with an origin declaration, not the invoice.

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VAT·17 July 2026·4 min read

How Do I Make a CETA-Compliant VAT Invoice for Exports to India?

Two documents, not one. Raise a standard UK VAT invoice (usually zero-rated for export) as the commercial invoice, then claim CETA's preferential tariff on a separate origin declaration you register for with HMRC. The invoice does not carry the origin claim.

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PAYE·16 July 2026·4 min read

Does the India-UK Trade Deal Remove National Insurance From My Payslip?

From 15 July 2026, an Indian employee posted to the UK by an India-based employer pays no UK National Insurance for up to 60 months, under the CETA Double Contributions Convention. Income tax and PAYE are untouched.

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PAYE·26 June 2026·4 min read

What Is Statutory Sick Pay and How Much Is SSP?

Statutory Sick Pay (SSP) is the legal minimum your employer must pay when you are too ill to work. For the 2026/27 tax year it is £123.25 a week for up to 28 weeks, paid from the first qualifying day of sickness. Since 6 April 2026 the three waiting days are abolished and there is no minimum earnings test, so every employee qualifies.

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PAYE·26 June 2026·4 min read

How Much Is Statutory Maternity Pay and How Long Does It Last?

Statutory Maternity Pay (SMP) is paid for up to 39 weeks: 90% of your average weekly earnings for the first 6 weeks, then the lower of £194.32 a week (2026/27) or 90% of your earnings for the next 33 weeks.

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PAYE·26 June 2026·4 min read

What Do the National Insurance Category Letters on My Payslip Mean?

Your National Insurance category letter (A, B, C, H, M and others) tells payroll which set of NI rates applies to you. Most employees are category A, paying 8% between the thresholds and 2% above for the 2026/27 tax year.

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PAYE·26 June 2026·4 min read

What Are the Minimum Auto-Enrolment Pension Contributions?

The legal minimum workplace pension contribution is 8% of your qualifying earnings: at least 3% from your employer and the rest, usually 5%, from you including tax relief. For 2026/27 qualifying earnings are the slice of pay between £6,240 and £50,270.

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PAYE·26 June 2026·4 min read

Is Payment in Lieu of Notice (PILON) Taxed?

Yes. Since 6 April 2018, all payment in lieu of notice is taxed as earnings, with income tax and National Insurance deducted through PAYE, whether or not your contract mentions PILON.

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VAT·26 June 2026·3 min read

When Do You Have to Register for UK VAT?

You must register for VAT once taxable turnover passes £90,000 over any rolling 12 months, or if you expect to pass it within 30 days. The threshold sits in Schedule 1 of the VAT Act 1994 and rose from £85,000 on 1 April 2024.

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VAT·26 June 2026·3 min read

Input VAT vs Output VAT: What's the Difference?

Output VAT is the VAT you charge on sales; input VAT is the VAT you pay on purchases. Your VAT return reports the difference and you pay HMRC the net, under sections 24 to 26 of the VAT Act 1994.

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VAT·26 June 2026·3 min read

What Is a Simplified VAT Invoice?

A simplified VAT invoice is a shorter invoice allowed for supplies of £250 or less including VAT. It needs only five fields instead of the full set, under Regulation 16 of the VAT Regulations 1995.

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VAT·26 June 2026·3 min read

How Does the Construction Industry Scheme (CIS) Work?

Under CIS, contractors deduct money from a subcontractor's pay and send it to HMRC as an advance on tax and National Insurance. The rate is 20% for registered subcontractors, 30% for unregistered, and 0% with gross payment status, under Part 3 of the Finance Act 2004.

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VAT·26 June 2026·3 min read

What Is Making Tax Digital for VAT?

Making Tax Digital (MTD) for VAT requires VAT-registered businesses to keep digital records and file returns through compatible software. It has applied to all VAT-registered businesses since 1 April 2022 under the VAT Regulations 1995.

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PAYE·26 June 2026·3 min read

What Is the HMRC Starter Checklist?

The HMRC Starter Checklist is the form a new employee completes when they have no P45. It replaced the old P46 in 2013, and the employment statement you tick, A, B or C, sets your first tax code.

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PAYE·26 June 2026·3 min read

Why Does the UK Tax Year Run 6 April to 5 April?

The UK tax year runs from 6 April to 5 April the following year, fixed by section 4 of the Income Tax Act 2007. The odd dates trace to the 1752 switch to the Gregorian calendar, and they set when your P60 and year-to-date figures reset.

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PAYE·26 June 2026·3 min read

How Do Scottish Income Tax Bands Differ in 2026/27?

Scottish taxpayers pay income tax across six bands in 2026/27, not the three used in the rest of the UK, set by the Scottish Parliament under section 13 of the Scotland Act 2016. Rates run from a 19% starter rate to a 48% top rate.

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PAYE·26 June 2026·3 min read

How Does Payroll Giving (Give As You Earn) Work?

Payroll Giving, also called Give As You Earn, lets you donate to charity straight from your pay before income tax is taken, so you get tax relief at your top rate automatically. It is governed by sections 713 to 715 of ITEPA 2003.

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PAYE·26 June 2026·4 min read

Net Pay or Relief at Source: How Is Pension Tax Relief Given?

UK workplace pensions give tax relief two ways: a net pay arrangement takes your contribution from gross pay before tax, while relief at source takes it after tax and HMRC adds 20% back. Both rest on section 188 of the Finance Act 2004.

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PAYE·26 June 2026·4 min read

What Is the Employment Allowance and Who Can Claim It?

The Employment Allowance lets eligible employers cut up to £10,500 a year off their employer (secondary) Class 1 National Insurance bill for 2026/27. You claim it through payroll, and it stops once the £10,500 is used up or the tax year ends.

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PAYE·26 June 2026·4 min read

What Counts as a Qualifying Year for the State Pension?

A qualifying year is a tax year in which you paid or were credited with enough National Insurance to count toward your State Pension. You need 35 qualifying years for the full new State Pension of £241.30 a week in 2026/27, and at least 10 to receive any of it.

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PAYE·26 June 2026·4 min read

What Is an Attachment of Earnings Order on My Payslip?

An attachment of earnings order (AEO) is a court instruction telling your employer to take money from your pay to clear a debt such as unpaid fines or council tax. A deduction from earnings order (DEO) is the equivalent for child maintenance, set by the Child Maintenance Service rather than a court.

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PAYE·25 June 2026·3 min read

What Does My UK Tax Code Mean?

A UK tax code is a number times ten (your tax-free Personal Allowance) plus a letter that sets the rule. 1257L is standard for 2026/27: £12,570 tax-free, then PAYE bands apply.

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PAYE·25 June 2026·3 min read

What Is the £12,570 Personal Allowance?

The Personal Allowance is the income you earn before any income tax. For 2026/27 it is £12,570, which is why the standard tax code is 1257L (£12,570 divided into your pay across the year).

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PAYE·25 June 2026·4 min read

How Does National Insurance Work on a UK Payslip?

Employees pay Class 1 NI at 8% on earnings between £12,570 and £50,270 a year, then 2% above. Employers pay a separate 15% above £5,000 in 2026/27. Only the employee line shows in your net pay.

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PAYE·25 June 2026·3 min read

What Is Emergency Tax (Week 1 / Month 1)?

An emergency tax code ends W1, M1 or X. It taxes each pay period in isolation instead of cumulatively, so you often overpay. HMRC corrects it and any overpaid tax is refunded, usually within the same tax year.

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PAYE·25 June 2026·3 min read

Gross Pay vs Net Pay: What Is the Difference?

Gross pay is what you earn before deductions. Net pay is what lands in your bank after income tax, National Insurance, pension and student loan come out. By law your payslip must show both and every deduction between them.

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PAYE·25 June 2026·4 min read

What Are the UK National Insurance Thresholds (LEL, PT, ST, UEL)?

Four thresholds set every National Insurance line on a UK payslip. In 2026/27 the Lower Earnings Limit is £6,708, the Primary Threshold £12,570, the Secondary Threshold £5,000, and the Upper Earnings Limit £50,270 a year.

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PAYE·25 June 2026·3 min read

What Is a National Insurance Number (NINO)?

A National Insurance number is your unique nine-character reference (two letters, six digits, one final letter, such as QQ123456B) that ties every tax and NI payment to your record. You keep the same one for life.

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PAYE·25 June 2026·4 min read

What Is a P11D and How Do Benefits in Kind Affect My Tax?

A P11D is the form an employer files to report taxable benefits in kind, such as a company car or private medical cover, to HMRC by 6 July after the tax year. The benefit is taxed by adjusting your tax code, so your payslip can change without your salary moving.

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PAYE·25 June 2026·4 min read

What Is Salary Sacrifice and How Does It Show on My Payslip?

Salary sacrifice means giving up part of your cash pay in return for a non-cash benefit, such as extra pension or a cycle-to-work bike. Because your taxable salary falls, you pay less income tax and National Insurance on a smaller amount.

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PAYE·25 June 2026·4 min read

What Must a UK Payslip Show by Law?

Under Section 8 of the Employment Rights Act 1996, a payslip must show gross pay, the amount and reason for every deduction, and net pay. Since April 2019 it must also show hours worked where pay varies by the hours.

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Privacy & safety·18 June 2026·4 min read

What Makes a Free Payslip Generator Safe? The Five Checks That Matter

A free payslip tool is safe when your figures never leave your browser, it asks for no NI number or email, it has a readable privacy policy, it runs no third-party trackers, and its rates match the current 2026/27 HMRC tables. Run all five before you type a penny of pay data.

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Mortgage·31 May 2026·3 min read

SA302 or P60: Which Document Do UK Lenders Want?

P60 evidences PAYE income; SA302 evidences self-assessed income. Which one a UK mortgage lender asks for depends on how you are paid, not which is easier.

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Document compliance·27 May 2026·3 min read

Quotation, Invoice, or Receipt: Which UK Document Do I Issue?

Quotation before the work, invoice on supply, receipt when payment lands. Each does one job; HMRC reads them differently in a VAT enquiry.

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Mortgage·27 May 2026·3 min read

What Do UK Lenders Check on a Mortgage Payslip?

UK mortgage lenders check three months of payslips against HMRC RTI, bank statements, and the P60. Desk-based or manual review depending on the file.

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Document compliance·27 May 2026·3 min read

When Should a UK Business Issue a Payment Receipt?

UK receipts are not required on every payment but are routine for cash, expenses, and paired with VAT invoices. Retention: 5 years sole trader, 6 years company.

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Mortgage·27 May 2026·3 min read

How Do UK Lenders Verify Payslips and Rent Receipts?

UK lenders verify in three layers: document parsing, third-party pulls (Open Banking, CIFAS, HMRC RTI), then manual or fraud-team review.

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Fraud detection·27 May 2026·3 min read

How Do UK Lenders Detect Fake Payslips? Seven Red Flags

UK lenders run seven mechanical tests on every payslip submitted. Failing one flags manual review; two or more route to fraud-team referral.

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PAYE·9 May 2026·3 min read

How Do I Get a Replacement P60 in the UK?

Most employers reissue P60s on request, but it's not a statutory duty. The HMRC Personal Tax Account holds P60-equivalent figures for the last 5 tax years.

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PAYE·9 May 2026·3 min read

What Do I Do If I Lost My P45?

HMRC does not reissue P45s. The Starter Checklist is the prescribed substitute; picking the right A/B/C statement determines the starting tax code.

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VAT·30 April 2026·3 min read

What Makes a UK VAT Invoice Valid?

A full VAT invoice carries 11 mandatory fields under Regulation 14. Simplified rules apply at £250 or less; reverse charge has its own wording requirement.

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Rent·27 April 2026·3 min read

How Does the UK Rent-a-Room Scheme Work?

Up to £7,500/year tax-free from a lodger in your main home, automatic below the threshold. Above £7,500, choose default or alternate basis each tax year.

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Pensions·24 April 2026·3 min read

Who Must Be Auto-Enrolled in a UK Workplace Pension?

Any worker aged 22 to State Pension age earning over £10,000 in 2026/27. Minimum 8% of qualifying earnings (£6,240–£50,270); 3% employer + 5% employee.

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PAYE·21 April 2026·3 min read

Which UK Student Loan Plan Am I On?

Five plans in 2026/27: P1 £26,900, P2 £29,385, P4 £33,795, P5 £25,000, Postgrad £21,000. 9% above the threshold (6% for Postgrad).

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PAYE·18 April 2026·3 min read

How Does UK PAYE Work in 2026/27?

PAYE assigns a tax code (default 1257L = £12,570 tax-free) and applies the 2026/27 bands cumulatively each pay period. Scotland sets its own rates.

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PAYE·15 April 2026·3 min read

How Do I Read a UK Payslip?

By law a UK payslip shows gross pay, every deduction, net pay, and hours where pay varies. Read in order: identifier block, gross, deductions, YTD, net.

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References

Last modified on 23 July 2026