MSE News: Budget 2013: Personal tax allowance

Reaper

Anarchist wrote: »

The reduction has pushed my earnings over the basic tax threshold. I'm now a higher rate tax payer, and have benefitted in no way whatsoever.

Assuming you mean the newly announced 2014/15 rates as jellyhead says have you included the increased tax free allowance of £10,000 in your calculation?

That means you have to earn £41,865 before you become a higher rate tax payer. Also anything you contribute to a pension effectively pushes the figure up higher.

vulcan59

There was a point in the chancellor's speech where he was talking about the 10% starting rate for income tax. I thought I heard him say it would become a 0% rate but I've not found anything in the budget report or anywhere else about it. Does anyone know?

molerat

Anarchist wrote: »

Great.

Just when I thought there would be some chance that there would actually be a budget policy that benefits me, a regular, average, single, skilled worker, it turns out there isnt.

The reduction has pushed my earnings over the basic tax threshold. I'm now a higher rate tax payer, and have benefitted in no way whatsoever.

That is what a pension is for.

murphydog999

Could anyone do me a favour and spell out how personal allowances affect higher rate (40%) income tax? My confusion arises from what part of a salary is effected by what rate. So, this coming financial year for example, how much can you earn before 40% tax comes in?

Suarez

murphydog999 wrote: »

so, this coming financial year for example, how much can you earn before 40% tax comes in?

£0 - £32,010

murphydog999

Thanks, but does that take into account your personal allowance?

twig1_2

No. You pay 40 % on anything over £41,450 the first £9,440 is tax free the next £32,010 is taxed at basic rate

Suarez wrote: »

£0 - £32,010

Suarez

twig1 wrote: »

No. You pay 40 % on anything over £41,450 the first £9,440 is tax free the next £32,010 is taxed at basic rate

You are right. It's been a long day.

murphydog999

Cheers twig, just what I needed.

twig1_2

The £32,010 is the amount you pay basic rate tax on after your personal allowances have been deducted. The £9440 is a typical single personal allowance

murphydog999 wrote: »

Thanks, but does that take into account your personal allowance?