Tax Band Query

jchowdavies

Hi,

Im am not sure if anyone is able to help?

I have currently a salary of £35k and due to the new tax rates and tax bands which are due to kick in April, this now falls under the new higher rate tax deductions of 40%.

I am due to get a pay rise of £1000 this year. which will bring me upto £36k

I wanted to find out whether i will be getting taxed 40% on the money over and above £35,000 (The extra £1000 pay rise) or will I get taxed on the whole amount the salary (FULL 40% ON THE new saary of £36K)?


I hope that makes sense.

Thanks in advance

Mudd14

You will only be taxed on the amount above the 35k limit (havent loked at the new tax bands yet), so 20% on everything above 7000 (whatever the new ratre is) to 35000 and 40% on the extra upto 150,000.

Really should look at the new bands conmsidering its my job to know ha ha

jchowdavies

Thanks for that info. it has put my mind at rest!

Cheers!

CLAPTON

indeed the 40% rate only applies to the amountover and above the 20% band

the figures will only be announced in the budget but currently the figures seem to be
7475 will be tax free
the next 34,900 will be 20%
so only income above 42,375 will be taxed at 40%

jennifernil

Tax rates here.......

http://www.hmrc.gov.uk/rates/it.htm

Note that the bands come on top of your personal allowance, so you do not pay 40% this current year till you have earned £6475 + £37400.

Next year £7475 + £3500