Maddy, maybe you should start a thread in B&E on how we can get rid of filing taxes. I would really love to know.
Re: Toronto/Canada facts.
Simple. The government is kept informed by other sources about your financial matters due to more state oversight of the details of your life. In the UK, the government keeps a lot more information on the personal and financial status of residents than in the USA.
You only need to file a tax return if you are:
- self employed people (including members of a partnership)
- company directors
- ministers of religion (any faith)
- people who get rent or income from land and property in the UK (but if you are an employee and this income is less than £2,500 a year a tax return may not be necessary)
- people who have other untaxed income and the tax due on it cannot be collected though a PAYE tax code
- people with taxable foreign income, even if they are not normally resident in the UK (this includes non-resident landlords)
- anyone who receives annually (or can be treated as receiving) income from a trust or settlement, or any income from the estate of a deceased person, and further tax is due on that income
- trustees and personal representatives (including people who manage the tax affairs of deceased persons)
- trustees of certain pension schemes
- names or members of Lloyd’s
These are the only people for whom the government does not have full access to all financial details.
Re: Tax Systems
So does that mean that UK government also know if and how much you paid in which charity ... or charities aren't tax deductible? What about medical records and how much you spend on your medical bills? (Part of it is also tax deductible in US) You can also deduct what you paid towards your non-traditional dependents (relatives with terminal deceases or old parents) ...
Re: Tax Systems
First, My copy and paste left out 1 important line. If you are a higher rate tax payer (earning more than £32,401) then you have to file a tax return if you want to reclaim money. I overlooked that since I’ve never been in that band.
The system the UK has is that the tax on a charitable donation can be returned only back to that charity if you are anything other than a person is eligible to file a tax return. The charity takes care of this as long as you assent to it.
As for medical bills, the state provides free medical care for all. Dental and optical care for over 18s is not free, but no tax breaks available.
Nothing about non traditional-dependents.
Basically, through a simplified taxation system, tax returns are eliminated for all but higher earners.