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Topic: Tax & Money

INTERACTIVE TOPIC · CHAPTER 5 — GOVERNMENT, THE LAW AND YOUR ROLE

Tax & Money

PAYE, National Insurance, Council Tax and the Old Lady of Threadneedle Street. Complete the tax chain, match each tax to its job, and flip the money facts.

⏱ About 8 minutesPASS PACK TOPIC6 learning blocksMastery check: 6 real questions
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STEP 1 · PRIME YOUR BRAIN

Before we start — have a guess

Two warm-up questions about your payslip.

When does the UK tax year start?

What do National Insurance contributions mainly fund?

STEP 2 · THE PICTURE

Where the money flows

You earn → Employer deducts PAYE + NI → Government funds pensions, benefits & services → Council Tax funds your local services

Most people never “pay” their income tax directly — it leaves the payslip before the money arrives. The Chancellor sets the plan each year in the Budget.

STEP 3 · LEARN BY DOING — 1 OF 2

Complete the tax chain

Most employees pay income tax through ····, taken from their pay by their employer. Workers also pay ····, which help fund state pensions and benefits. The tax year runs from ····. And the Chancellor announces the tax plans each year in ····.

GAP 1
GAP 2
GAP 3
GAP 4
LEARN BY DOING — 2 OF 2

Match the taxes

Tap a tax, then tap what it does.

MONEY FACTS

Flip the details

Answer in your head first, then tap to check.

TAP TO REVEAL

What does the Bank of England actually control?

It sets the UK’s official interest rate — the base rate that shapes mortgages and savings. Its nickname is the Old Lady of Threadneedle Street.

TAP TO REVEAL

Who needs a National Insurance number?

Everyone who works in the UK — your NI number is how your contributions are recorded for pensions and benefits.

TAP TO REVEAL

Self-employed? How is tax paid then?

Through self-assessment — you file a tax return and pay what you owe, instead of an employer deducting PAYE.

TAP TO REVEAL

What are inheritance tax and stamp duty?

Inheritance tax can be charged on a person’s estate when they die; stamp duty is paid when you buy a home above a threshold.

STEP 4 · QUICKFIRE RECALL

True or false — no thinking time allowed

STEP 5 · MASTERY CHECK

Six real questions on this topic

Score 5 or 6 and this topic is marked mastered on your path. Anything less: revisit the block you missed and retake.

Question 1 of 60 answered · 0 correct
Question 1 · Chapter 5: Government, Law & Your Role
The Chancellor of the Exchequer is the Cabinet minister in charge of which area?
The Chancellor of the Exchequer leads the Treasury and is responsible for the economy, taxation and public spending.
Question 2 · Chapter 5: Government, Law & Your Role
In government, what is 'the Budget'?
The Budget is the Chancellor of the Exchequer's annual statement to Parliament about taxation and public spending.
Question 3 · Chapter 5: Government, Law & Your Role
What does PAYE stand for in the UK tax system?
Under PAYE (Pay As You Earn), an employer takes income tax and National Insurance off an employee's wages or pension before paying them.
Question 4 · Chapter 5: Government, Law & Your Role
The Bank of England is sometimes given a nickname. What is it?
The Bank of England, whose headquarters are on Threadneedle Street in the City of London, is nicknamed the Old Lady of Threadneedle Street.
Question 5 · Chapter 5: Government, Law & Your Role
Which TWO of these statements about paying income tax are correct?
Choose TWO answers — select both to see the result
Employees pay income tax through PAYE (Pay As You Earn), where the employer deducts tax from their pay before they receive it. Self-employed people do pay tax, and they are responsible for arranging to pay it themselves — neither their customers nor their bank pays it for them.
Question 6 · Chapter 5: Government, Law & Your Role
The Bank of England is responsible for setting the UK's official interest rate.
The Bank of England, which is independent of the government, sets the official interest rate through its Monetary Policy Committee.

✓ green = correct · ✗ red = wrong · 🚩 red ring = marked for review · gold outline = current question

✕ Exit to Topics
STEP 6 · TEACH IT BACK

Say it in your own words

Explain how most employees pay their income tax, and what National Insurance contributions are for. Say it out loud or write it down — then compare.

Reveal a model answer

Most employees pay through PAYE — Pay As You Earn — where the employer deducts income tax and National Insurance from wages before paying them. National Insurance contributions go towards state pensions and benefits. People who are self-employed pay instead through self-assessment, filing a tax return for the year, which runs from 6 April to 5 April.

Where next?

Drill all of Chapter 5 in the Chapter 5 practice sets, or pick your next topic on the Topics path.