When would I pay the 40% tax rate?

[El Cid]

Hi

 

I know HMRC says £43,000 of taxable income, but does that include the personal allowance?

An old relative that worked in the wage department seems to be saying that a personal allowance of £11,000, then £43,000 - so that would mean the tax rate of 40% would start at £54,000?

[Robin-H]

Hi

 

I know HMRC says £43,000 of taxable income, but does that include the personal allowance?

An old relative that worked in the wage department seems to be saying that a personal allowance of £11,000, then £43,000 - so that would mean the tax rate of 40% would start at £54,000?

 

The amount of earnings over £43,000 but below £150,000 is taxed at 40%. I thought the personal allowance was part of that, but if it stipulates taxable income maybe not..

 

http://www.thesalarycalculator.co.uk/about.php

 

"Any taxable income (i.e. that income above the personal allowance) up to £33,500 is taxed at 20%, from £33,501 to £150,000 is taxed at 40% and taxable income over £150,000 is taxed at the rate of 45%. The 10% "Starting Rate" of income tax was removed in the April 2008 budget."

Edited April 1, 2017 by Robin-H

[cgksheff]

Taxable Income £60,000 pa

£11,000 not taxed

£32,000 taxed at 20% (i.e. between 11k & 43k)

£17,000 taxed at 40%

Edited April 1, 2017 by cgksheff

[apelike]

.... Better explanation above.

[Ethella]

I think that it's gone up from £43,000 to £45,000 today. The personal allowance has also gone up to £11,500.

[ez8004]

Breaking £100,000 also means that you start losing your personal allowance and I think you lose it completely at £122,000.

[El Cid]

I think that it's gone up from £43,000 to £45,000 today. The personal allowance has also gone up to £11,500.

 

Thanks all, The Government web site still shows £43k, it could change on the 5th/6th April

[Cyclone]

https://www.gov.uk/government/publications/tax-and-tax-credit-rates-and-thresholds-for-2017-18/tax-and-tax-credit-rates-and-thresholds-for-2017-18

 

What government site were you checking, the details are all here.

[Obelix]

the website http://www.listentotaxman.com is a nice site giving you a good breakdown with just your tax code and salary.

 

If you don't know your tax code leave it blank and it'll assume you have a full allowance without any BIK etc.