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Comment by Twirrim | Hacker News Reader

In the UK most people never file taxes. It's all done Pay As You Earn (PAYE), i.e. taken out of your monthly pay check. You get an annual summary of your tax payments every year, as well as it being detailed each month on your pay stub.

People that are self employed tend to need to do self-file, or those with slightly more complicated investment approaches but even then that's generally not a particular hard task.

One of the other advantages of it, is it discourages a rebate based approach to incentives. With most people not needing to file taxes each year, rebates wouldn't be particularly effective at encouraging behaviour. The government instead opts for subsidies, so the item is cheaper _at the time of purchase_. No shelling out the extra money and then eventually clawing it back, without any interest it might have accrued for you.

It was quite a shock when I moved to the US and got to experience the "delights" of filing taxes here.

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How many people go through the process of making sure the gov’ts calculations are right?

And for those that don’t, how many are losing out on money because of an error?

The UK tax system is very simple in most cases. Everyone has a “tax code” which denotes how much tax free allowance they have, if they have a company car, etc, and the tax scale is progressive with a few bands. Your employer actually deducts the tax and forwards it so as long as the code is correct (and for most regular wage earners the code is a default that is never changed) your employer’s payroll system spits out the tax withheld at the end of each month. There’s no annual return (again, for most people) and no need for refunds or additional payments. Most interest/benefits is either paid outside the tax system or already has withholding applied.

I’m not saying it can never be wrong, just that the system is simple and employers have done it for years. If one really wanted to check comparing to a website like https://listentotaxman.com/m/ is easy.

My parents have almost 100 working years between them and have never once filed a tax return.

For those who do file, the return is quite straightforward. There are some weird bits — capital gains on stocks are much more complicated than the short/long hold in the US — but on the whole a UK return is a couple of dozen pages (many of which are skipped) and easily within the scope of a self-filer.

If you think you can beat the system you have the option of a voluntary self-assessment for under 100k, over 100k you have to file one anyway and it offers plenty of wiggle room. Self assessment is such a non-event the entire procedure always feels new by the following year.

How many people that do their own calculations actually come up with a lower number than the government would have charged them in the first place?

Almost none, because that’s highly unlikely for most people. The system is designed such that most tax-related things don’t need a return and end of year squaring up. Income is taxed monthly by subtracting the correct amount. Interest is tax free to a threshold then has automatic withholding. Investments and savings can be held in tax-free wrappers with no reporting requirement. Benefits are paid outside of the tax system, etc.

The way it works, you get a tax code. The tax code is documented on your pay stub. The tax code changes based on things like marital status, kids, etc. The tax codes are all standard and you can easily look them up. That tax code informs payroll software how you're supposed to be taxed, and it adjusts automatically.

If you're US Based, think of it as being similar to the withholding calculation, only significantly more accurate.

I've known a few people that manually check their taxes each year, and never known them to find mistakes. Most people just don't bother.

HMRC already has the information it needs to calculate the information correctly. The same is actually true of IRS too. For almost all cases, the IRS can accurately calculate your taxes for you. In several countries, the agency responsible for taxes pre-populates your tax document for you, and sends it to you to sign off on each year. Doing taxes often involves no more than skimming through a document to verify accuracy, and mailing it off.

In the US? Plenty. I've had the gov't misattribute income before, and not in my favor.

And it's not just the gov't. I assume your employer is the one transmitting the info back to the gov't. I've had my employer miscalculate my social security tax in one paycheck.

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