Tax Rates 2012/13 Article Discussion

SYTax

In your case, it sounds like you won't be able to claim any historical tax back.

Going forward, you should try and make sure you are contributing to a 'relief at source' pension (google this). This will give you a 25% boost as the money goes into a pension pot. You get this even if your income is below the personal allowance.

If your employer doesn't offer this type then your only option is a personal pension. Note there is a limits on how much you can put in a personal pension, particularly as a low earner. Don't give up employer match contributions though - this will be better than the 25% boost.

Penfold4140

I'm confused, hopefully someone can help. Does the new rate mean that someone in England will now pay 32% combined tax and ni on salary up to £46350 (not counting tax free allowance), then will only pay 22% combined tax and ni on earnings between £46350 and £50000, above which it will go back up to 42%?
And in Scotland will be paying combined 33% prior to reaching £43430, then a whopping 53% on earnings between £43430 and £46350, dropping back to 43% on anything above this?
Seems crazy to me.

Edit: Non of the above accounting for pension contributions or tax free allowances.

Dazed_and_confused

What new rate?

Tax and NIC are worked out completely separately and each has its own starting threshold.

Penfold4140

Sorry, not sure how this ended up in an old tax rate discussion. Was meant to relate to the new 2019 income tax rates. The thresholds at which tax increased to 40% and NI reduced to 2% used to align ( both £46350 in 2017/2018). Now they no longer align, so there are anomalies in the combined percentage of salary paid to tax and NI. There are now small salary bands in England ( between 46350 and 50000) where a much larger percentage of the earnings lands in your pocket, whereas in Scotland there is a similar band (between 43430 and 46350) where a much larger chunk lands in the government coffers.

keef82

Hi guys, sorry if this is obvious but I’m really struggling to understand the logic around higher tax band. I’m paying 40% on everything I earn over £34,501. However I’ve seen on the gov website that the higher rate is anything over £50k. This is a big difference. How is it calculated where you sit between £34k and £50k?

zagfles

keef82 said:

Hi guys, sorry if this is obvious but I’m really struggling to understand the logic around higher tax band. I’m paying 40% on everything I earn over £34,501. However I’ve seen on the gov website that the higher rate is anything over £50k. This is a big difference. How is it calculated where you sit between £34k and £50k?

What's your tax code? Do you have benefits in kind, eg company car?

Dazed_and_C0nfused

And where are you resident for tax purposes?

keef82

My tax code is 1256L. No benefits, no car etc. 

keef82

been living, working and paying tax in the UK all my life. Dazed_and_C0nfused said:

And where are you resident for tax purposes?

Dazed_and_C0nfused

Where on earth are you getting £34,501 from?

Your code looks straightforward, probably Personal Allowance plus £60 expenses.

So as you aren't Scottish resident for tax purposes you will need to have taxable income of £50,061 before any higher rate tax is likely to be due.