Chapter 5: The UK Government, the Law and Your Role

Taxation, National Insurance and Driving

Last checked: 15 July 2026

• 1Income tax is paid on: wages from employment, self-employment profits, most pensions, savings interest, rental income, and some state benefits.
• 2Income tax pays for services such as roads, education, police and the armed forces.
• 3Most employees pay income tax automatically through PAYE ("Pay As You Earn"), deducted by the employer from wages.
• 4Self-employed people must register with HM Revenue & Customs (HMRC) and pay their own tax through a self-assessment tax return.
• 5HMRC is the government department that collects taxes; help is available via its self-assessment helpline and website.
• 6National Insurance contributions (NICs): almost everyone in the UK who works must pay them; the money funds state benefits and services, such as the State Pension and the National Health Service.
• 7Employees' NICs are deducted from pay by the employer; self-employed people must pay their own NICs.
• 8People who do not pay enough National Insurance may not be able to claim certain contributory benefits (e.g. Jobseeker's Allowance) or a full State Pension.
• 9A National Insurance number is a unique personal number that ensures your contributions are recorded correctly.
• 10Young people in the UK receive their National Insurance number just before their 16th birthday.
• 11A non-UK national needing an NI number to work can apply through Jobcentre Plus (Department for Work and Pensions); you can usually start work before the number arrives, but having an NI number does NOT prove you have the right to work in the UK.
• 12Driving age: you must be at least 17 to drive a car or motorcycle (a moped can be ridden at 16), and you must hold a driving licence.
• 13To get a UK licence you first apply for a provisional licence, then pass both a theory test and a practical driving test.
• 14In Northern Ireland, a newly qualified driver must display an "R" (restricted) plate for one year after passing the test.
• 15A driving licence is valid until age 70; after 70 it must be renewed every three years.
• 16Driving on a foreign licence: if your licence is from the EU, Iceland, Liechtenstein or Norway (as of 2013), you can drive in the UK for as long as your licence is valid; with a licence from any other country you may drive for up to 12 months, after which you must pass a UK driving test.
• 17Car ownership requirements: the vehicle must be registered with the DVLA (Driver and Vehicle Licensing Agency); you must pay vehicle tax (road tax); and you MUST have motor insurance — driving without insurance is a serious criminal offence.
• 18Vehicles over three years old must pass an MOT test every year (Ministry of Transport test); driving without an MOT certificate is illegal and can invalidate insurance.