WHat are 2006 - 2007 Threshold Bands ?

Joey122

I see this :

Personal allowance 5,035

Starting Rate 10% 10% 0 - 2,150
Basic Rate 22% 22% 2,151 - 33,300
Higher Rate 40% 40% Over 33,300


WHat does this mean in principle ? That if you earn 38,350 you are paying only 22% tax?

jem16

It means that you will be paying 40% tax on the amount above £38,335. So if you earn £38,350 you are paying 40% tax on £15.

Joey122

Thanks this makes sense

Joey122

Is there a tax calculator online which breaks down the amount of tax you are paying - I tried this http://www.listentotaxman.com/

but it does not give a breakdown

jem16

What kind of breakdown?

If you mean how much is at 10%, how much is at 22% and how much is at 40% it's easy to work out yourself.

For example £38350 salary; ( based on 2006/7 )

£38350 minus £5035 = £33,315

First £2150 at 10% = £215 ( leaves £31,165)
Next £31150 at 22% = £6853
Next £15 at 40% = £6