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How much do you have to earn before you pay 40% tax
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# 1
northernsal
Old 27-01-2008, 6:27 PM
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Default How much do you have to earn before you pay 40% tax

Hi there,

Can someone please explain the tax boundaires. How much do you have to earn before you have to pay 40% tax, alos what is the other boundary for twenty percent tax.

I have a long commute to work but am not self employed, would I be eligble for any tax allowances for journeys etc.

Thanks in advance

X
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# 2
Riq
Old 27-01-2008, 6:30 PM
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Your journey to work is not tax allowable.

The boundaries for this tax year are

£1-£2,230 = 10%
£2,231-£34,600 = 22%
£34,601+ = 40%

This all starts after your £5,225 has been used up of course.
"I'm not from around here, I have my own customs"
For confirmation: No, I'm not a 40 year old woman, I'm a 26 year old bloke!
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# 3
northernsal
Old 27-01-2008, 6:35 PM
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This all starts after your 5,225 has been used up of course.[/quote]


:confused: Hi Riq,

WHat do you mean by this?
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# 4
Riq
Old 27-01-2008, 6:38 PM
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You have a personal taxfree allowance of 5,225 which you can earn before you pay any income tax on it.

Sorry, I am not the best person at explaining things. Thankfully I am not a teacher!
"I'm not from around here, I have my own customs"
For confirmation: No, I'm not a 40 year old woman, I'm a 26 year old bloke!
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# 5
jem16
Old 27-01-2008, 6:57 PM
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Quote:
Originally Posted by northernsal View Post
This all starts after your £5,225 has been used up of course.


:confused: Hi Riq,

WHat do you mean by this?

Basically it means that assuming tax code of 522L you can earn £39,825 before you enter higher rate tax. ( £34,600 + £5225 of personal allowance).
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# 6
CarolynH
Old 05-02-2008, 5:21 PM
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Quote:
Originally Posted by jem16 View Post
Basically it means that assuming tax code of 522L you can earn 39,825 before you enter higher rate tax. ( 34,600 + 5225 of personal allowance).

And you'll only pay 40% tax on earnings above this level - it seems to be a common misconception that once you hit the 40% level you pay 40% of everything.
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# 7
Zebedee69
Old 05-02-2008, 6:32 PM
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Dont forget to keep your reciepts (Grrrr im going through mine right now!).............
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# 8
frog_southampton
Old 12-02-2008, 10:10 PM
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Hi i have a tax code of 233L/1 and have a company car.
What does this mean for me?
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# 9
jem16
Old 12-02-2008, 10:31 PM
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It means you have 2330 of personal tax-free allowances. probably because of your company car which is a taxable benefit so it reduces your allowances.
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# 10
frog_southampton
Old 13-02-2008, 8:30 PM
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i dont even want a company car but need it for my job!
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# 11
bigstevex
Old 14-02-2008, 9:27 PM
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Company cars lower your free tax limit by 3K, soo...
correct me if i'm wrong but...

0-2330 - tax free
2330 - ~4500 - 10%
4500 - ~36900 - 22%
anymore is 40%

Those figures are approx! also as of april this year (i think) there are only 2 tax bands of 20% and 40%
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# 12
Jelen
Old 15-05-2011, 9:05 AM
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Hi regarding not wanting a company car and needing it for your job there is great little used trick for avoiding paying any tax on a company car but still getting full benefit for your work there are a few things you need to do to set it up as follows
1 buy a car
2 inform your company that you no longer use the vehicle for personal use
3 leave the car at your place of work when you go home
Simples
It may seem bizarre but it is what ambulance fire and police drivers have been doing for years and they pay no tax for the use of the "company vehicle"
However when you work out the costing you ll find that for the same cost as your tax your own car won't be quite as nice

Lol
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