Higher Rate Tax Bracket

ChloeRadshaw

Does anyone know how much you need to earn before getting charged 40%?

Is it 40K?

My tax code is 603L - I have not worked this year and just stared a new job earning 50K.

Will I be taxed correctly given that I have not earnt my minimum tax allowance 6k about?

Any ideas?

CLAPTON

for the tax year 6th april 2008 to 5 th april 2009

you have a tax free allowance of 6035
then the next 34,800 is taxed at 20%
and everything above that is taxed at 40%

you need to ensure your tax code is correct asap... and then you will be taxed correctly

ChloeRadshaw

Is 603L a 'correct' tax code?

Is this an emergency code?

What should it be please

Thanks

CLAPTON

603L is the correct code for 'normal' people

chrisbur

ChloeRadshaw wrote: »

Is 603L a 'correct' tax code?

Is this an emergency code?

What should it be please

Thanks

How is this code being applied is it cumulative or month 1 basis?
When you started did you hand in a P45 or complete a P46 if so which box did you select A,B, or C?

ChloeRadshaw

chrisbur wrote: »

How is this code being applied is it cumulative or month 1 basis?
When you started did you hand in a P45 or complete a P46 if so which box did you select A,B, or C?

I dont know whether its cumulative or month 1 basis as payroll have not been that helpful

I handed in a P46 and ticked the box which indicated that I had not worked in this tax year (I cant remember which letter but I definitely remember ticking the right box)-

I would have expected my tax code to be different given that I had 9 months of unpaid income but does it not work like this?

Mi_bargains

Your tax code will be 603L whether you have worked this year or not.

The only difference to this code will be if you are in receipt of any taxable benefits (such as a company car, free bupa cover etc) this will give you a lower code.

If you want to check how much tax you will be paying use this website

http://listentotaxman.com

Just fill in the boxes "Tax code" and "Gross income every year". Bear in mind that the income you include for this year will be all of your income up to the end of March 2009 (i.e. £55,000/12 * how many months you will work until march 09).

chrisbur

ChloeRadshaw wrote: »

I dont know whether its cumulative or month 1 basis as payroll have not been that helpful

I handed in a P46 and ticked the box which indicated that I had not worked in this tax year (I cant remember which letter but I definitely remember ticking the right box)-

I would have expected my tax code to be different given that I had 9 months of unpaid income but does it not work like this?

Having completed a P46 then you should have been put on an emergency tax code. If you confirmed on the P46 that you had not had any taxable income (work, benefit, or pension ) then you should have been put on 603L cumulative. If you declared that you did have taxable income you should have been put on 603L month 1 basis.
You should be able to tell from your payslip which you are on, it is usually shown next to your tax code. As a rough guide on your 50K or about £4166 a month if you get your first pay in month seven and you are on 603L cumulative you will pay about £129 tax but if you are on 603L month 1 you will pay about £885 tax.
It may be that when the tax office look at your tax situation your correct tax code could well be 603L cumulative. This will be your code if you have no adjustments to be made for example tax owed from a previous year or some taxable benefit from your employer eg loan or health care.

thomson2008

There are now nearly 4m higher-rate taxpayers in the UK – nearly twice the number paying 40 per cent tax in 1997 – the Government confirmed this week.
With so many people caught in the top tax net, this means tens of thousands are facing a double whammy of rising prices and higher taxes.

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