Money Programme BBC2 9pm

cutestkids

Hi
When calculating tax you would not pay 40% tax on your whole income you pay basic rate tax of 20% up to £37,400 and then you pay 40% on the amount above £37,400 up to £150,000.

These were the threshold for 2010 - 2011 but will be lower from next year with the higher rate kicking in at £35,000.

Running the figures through a tax calculator the take home pay on £47,000 is around £34,000 after tax and NI

roddydogs

Its really quite simple just Google "Uk tax calculator" , type in the details, Simples.

JulieGeorgiana

cutestkids wrote: »

These were the threshold for 2010 - 2011 but will be lower from next year with the higher rate kicking in at £35,000

I haven't heard about this... it's a really scary thought for many people! They are going to pay £450 a month more in tax a MONTH when this changes... where are they going to find that kind of money??

MRSTITTLEMOUSE

Hardup_Hester wrote: »

My take on money & having enough is probably a little skewed, as if we can pay the bills I'm happy. Between us hubby & I take home nearly £21k, his train fares are £1500pa plus the petrol I use driving him to the station. I feel comfortable financially despite living in the south east which is not cheap & paying a mortgage of £400 a month. The list of things we don't have is pretty long, lol, but it works for us.
Hester

Did'nt see the programme but just want to say that I totally agree with what Hardup Hester has to say.
We've lived on less than the dole when our children were young (no minimum wage back then and my husband preferred to work) and more than the 40k mentioned and we've never been any less or more happier no matter what our income.
Its hard having no money but you can manage and attitude has a lot to do with it.
I look back and am amazed at how inventive we were and how content we were.
We had very little to lose so had very little to worry about.
As Hardup Hester says she has a pretty long list of things they don't have but feels "financially comfortable".
I'd agree with that as I've felt like that myself,having "things" does'nt make you happy for very long.
There are a lot more than just "things" needed to have a happy fullfilled life.

cutestkids

JulieGeorgiana wrote: »

I haven't heard about this... it's a really scary thought for many people! They are going to pay £450 a month more in tax a MONTH when this changes... where are they going to find that kind of money??

Hi
If you go on to HMRC website you can get the information on the tax bands and personal allowances for the next 3 years.

Again the higher rate kicking in at £35,000 next year will mean that compared to this year someone paying 40% tax on the higher portion of earnings will do so on an extra £2400 so around £900 more tax per year, this is offset slightly by the fact that the personal allowance will increase next year meaning an extra £1000 can be earned before any tax is payable.

Please do remember the 40% is not taken from the entire pay only on the amount earned over the higher rate threshold so everything earned under £35000 next year will be taxed at 20% after the personal allowance is taken in to account.

For the average family where income is much less than £35,000 it should in theory make them slightly better off due to the increase in personal allowance, of course this may be offset again if the benefits reforms and tax credits affect you.

JulieGeorgiana

cutestkids

I see I have a gap in my education! I thought I understood tax, but it would seem we live and learn

So help me understand...

Example, I earn £40,000

The first £0 - £7475 = 0% tax = £0
The next £7476 - £35,000 = 20% tax = £5505
The rest £35,001 - £40,000 = 40% tax = £2000

Total £7505

While I was doing 40% on £7,476 - £40,000 and getting £13,000 in total tax!

Please tell me I have this right now?!?!?!

cutestkids

JulieGeorgiana wrote: »

cutestkids

I see I have a gap in my education! I thought I understood tax, but it would seem we live and learn

So help me understand...

Example, I earn £40,000

The first £0 - £7475 = 0% tax = £0
The next £7476 - £35,000 = 20% tax = £5505
The rest £35,001 - £40,000 = 40% tax = £2000

Total £7505

JulieGeorgieanna

Hi yes thats how it is worked out there can be slight variations depending on personal circumstances, but on the whole for the average working person this is how it is worked out, you would have just under £4000 in NI contributions on top of the tax on a £40,000 wage.

It is also worth pointing out that it is earnings from all jobs so if you have a full time job and a second job to top up your income it is prudent to keep an eye on the total years earnings from both jobs.:D

sleepless_saver

JulieGeorgiana, put the figures into this tax calculator. It clearly shows the amounts payable at each tax rate and the NI contributions.

cobbingstones

Can I ask a simple question? the chap who had lots of different 'pots' of money for this and that, do you think he saved that money in jars etc or had lots of different bank accounts? if it was bank accounts, would he therefore access the money with a bank card? I was curious as he had about 15 different 'pots'.

JulieGeorgiana

cobbingstones wrote: »

Can I ask a simple question? the chap who had lots of different 'pots' of money for this and that, do you think he saved that money in jars etc or had lots of different bank accounts? if it was bank accounts, would he therefore access the money with a bank card? I was curious as he had about 15 different 'pots'.

It looked like he did what i do... I put all mine in one bank account (easy access savings) and have a breakdown on a spreadsheet for how much is allocated into which 'pot'

So they are virtual 'pots'

i have a friend with 10 accounts to do the same thing... and trust me that get's confusing.

If you take the money out of the bank, you loose on what tiny interest there is... and risk someone stealing it.