Nobody enjoys thinking about taxes. But, unfortunately, it’s a necessary nuisance, something we all have to do whether we like it or not.
Nonetheless, even though it is not everyone’s favourite subject to talk about, it is essential to understand how taxes affect you. Apprentices, like all other employees, must pay taxes on their earnings. Therefore, starting an apprenticeship, you should get familiar with the tax system to avoid paying the wrong amount.
Apprentices are classified as employees and are taxed accordingly. Unfortunately, this implies that you’ll have to pay income tax and National Insurance Contributions (NICs) just like everyone else.
The Pay As You Earn (PAYE) method is often used to tax you. Under PAYE, tax is taken ‘at source,’ which means it is deducted straight from your pay packet. Consequently, you should not need to file a Self Assessment tax return.
You will be given a tax code. This series of letters and numbers inform HMRC and your employer about how much money should be deducted from your paycheck.