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how much?
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begbeer
Posts: 223 Forumite


in Cutting tax
How much can I earn per year without going into the 40% tax bracket, my tax code is 647L
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38,000 quid, roughly.
have pity on me, im on a K433 code!
please dont forget its not 40% of everything, only 40% of earnings over 38,000, so its not so bad to actually go over.Target Savings by end 2009: 20,000
current savings: 20,500 (target hit yippee!)
Debts: 8000 (student loan so doesnt count)
new target savings by Feb 2010: 30,0000 -
simple answer is you add your (positive, ie 647L) tax code to the 40% threshold to get the amount of money you can earn before you pay higher rate (a K code is, simplistically, a negative code which is, I assume, why Dave's "understanding" is "different")
so in OP case 6,475 + 37,401 = 43,876
you will pay 40% on any money you earn over 43,875 and basic rate ie. 20% on your earnings between 6,475 and 43,875 with (obviously) the first 6,475 earnt being free of tax.
the more complex answer depends on whether you make pension contributions, if the OP does this, them post back here and we can explain further0
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