Higher Rate Tax Payer

Woggle

Hiya,

Can someone please tell me the limit for basic rate tax payers? I think I'm close to the threshold as salary has recently changed.

My tax code is 653L - is there any way to tell from this if I'm basic or higher rate?

Empty_pockets

No, the 653 is your tax free allowance, £6530.

After that you pay 20% up to the higher limit.

I think it's just been/due to be reduced soon to about 35K, after which you'll pay 40%

CLAPTON

in this tax year and with your taxcode of 653L

then the first 6539 is tax free
then the next 37,400 is taxed at 20%

so you will only pay 40% if you earn more than 43,939 pa
if you pay into a pension then that is tax free; so if e.g. you pay 2,000 gross into a pension then you would only pay 40% tax if you earned 45,939 pa

bear in mind that once you start paying 40% tax then there may be additional tax to pay on savings interest or share dividends