why am i not paying 40% tax?

matthewleehood123

hi,

My tax code is 603L/0 and this year so far i have earnt (according to my pay slip) £49785 taxable pay, underneath it says £51075 Niable and i dont quite understand what this means. could someone please explain it to me?? surely i should be paying higher tax by now?


Thanks in advance

Baz_2

How do you know you are not paying 40% tax?

CLAPTON

presumably you now have your March payslip?
post up all the figures on the paysip
including

YTD gross pay
YTD taxable pay
YTD tax
YTD pension

and this months
gross pay
taxable pay
tax
pension
NI deduction

matthewleehood123

YTD gross pay £51075
YTD taxable pay £49785
YTD tax £10538
YTD pension £ n/a

and this months
gross pay £4900
taxable pay as above
tax £1178.40
pension £n/a
NI deduction £332.87


hope thats the info you needed to help me....

thanks

CLAPTON

I assume gross pay includes some non taxable items (expense?)

so taxable pay =49,785
tax free =6,039
leaving 43,746 to be taxed
the first 34,800 is taxed at 20% (i.e. 6960 in tax)
and the remainder i.e. 8946 is taxed at 40% i.e. tax =3,578

so your total tax is 6960 plus 3580 = 10,538

so you are being taxed at 40% on 8946 of your salary

you may want to consider starting a pension scheme and putting some of the money into that so avoiding some tax.

If you have saving a/c or receive dividend you need to inform the HMRC as this will be liable to 40% tax.