Tax allowances

teajug

I read that pensioners income over £24,000 will pay tax on it at 50%.

Also people earnings of over £150,000 will also pay tax at 50% is this correct. :mad:

noh

I read that pensioners income over £24,000 will pay tax on it at 50%.

Not correct

Also people earnings of over £150,000 will also pay tax at 50%

Correct. Earnings above £150k per annum are taxed at 50%.


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

CLAPTON

well people over 65 have a tax free allowance of 9,490 (10,090 if over 750) rather than the normal 7,475
however if their income is over 24,000 then for every £2 over they lose £1 in the allowance until they get back to 7,475.
so the marginal rate of tax will be 30% between 24,000 until just over 28,000 when it falls back to 20%

teajug

I do not understand where it says after income of 24,000 the for every extra £2 earned £1 would be lost in th allowance, to me that is 50% tax.

Or am I missing something here.

CLAPTON

for every extra pound you earn over the tax allowance you normally pay 20% tax

after 24,000 for every extra pound you pay the 'normal' 20% i.e. 20p and also lose the tax free allownace of £0.50 i.e to pay an extra 20% on £0.5 i.e. 10p

so in total you pay 30p tax on each extra pound i.e. 30%

cte1111

It's not that pensioners are taxed more, it's just that pensioners who have a medium / high sized income aren't given the same extra tax break as pensioners on low incomes.

teajug

I feel that pensioners income that is £15K should not pay any tax whatsoever, 15k fixed income is hardly a fortune to live on nowadays

Pennywise

teajug wrote: »

I feel that pensioners income that is £15K should not pay any tax whatsoever, 15k fixed income is hardly a fortune to live on nowadays

A pensioner on £15k already pays less tax than someone under pension age with £15k income, so pensioners are actually getting a better deal than workers as regards tax.

AirlieBird

Although, of course, this Government is slowly eroding the tax benefit to elderly people with the over indexation increases to the standard personal allowance and normal increases to the aged PAs.