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Does the £100k Personal Allowance Limit Increase with Inflation?
fiisch
Posts: 512 Forumite
in Cutting tax
Sorry for asking a question that I should be able to look-up, but my Google skills are letting me down on this one (probably as I am struggling to word this correctly), and having not been PAYE for a few years I've not had to worry about these before.
Does the effective 60% tax rate for earnings above £100k (with the gradual reduction of personal allowance) increase over time? I.e.: Has it previously always been £100k, or does it move with inflation, per the personal allowance/higher tax bracket?
Reason for asking is despite being fortunate to be hovering around this level, we've really noticed a squeeze on our disposable income with costs rising (certainly not expecting any sympathy, but we have some high outgoings for next few years and my better half is only able to work a few hours per week currently). I am becoming increasingly concerned that my take home pay will remain the same irrespective of any cost of living rise due to the desire to avoid the 60% effective tax rate, but outgoings will be much higher.
TIA
Does the effective 60% tax rate for earnings above £100k (with the gradual reduction of personal allowance) increase over time? I.e.: Has it previously always been £100k, or does it move with inflation, per the personal allowance/higher tax bracket?
Reason for asking is despite being fortunate to be hovering around this level, we've really noticed a squeeze on our disposable income with costs rising (certainly not expecting any sympathy, but we have some high outgoings for next few years and my better half is only able to work a few hours per week currently). I am becoming increasingly concerned that my take home pay will remain the same irrespective of any cost of living rise due to the desire to avoid the 60% effective tax rate, but outgoings will be much higher.
TIA
0
Comments
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The £100k threshold is set at each budget in the same way as all other income tax thresholds. Personal allowance and 40% band and 45%0
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It has been £100,000 since it was introduced in 2010, and as all other allowances have been frozen until 2026, there is no likelihood of any change.0
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the treasury is doing very well out of not changing the thresholds, suspect they are unlikely to change0
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Ah - good old stealth taxes...
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It would be quite hard for the current administration to change this threshold without being seen to only care for the rich...0
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It is somewhat odd that someone with an income of £105,000 pays an effective rate of tax of 60% on their top £1, and someone with an income of £105 million pays an effective rate of tax of 45% on their top £1. No more stupid I guess than the penal rates paid by people earning just a little over the benefits figures.1
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Thanks chaps - as Jack Reacher would say, I guess it's a case of "hope for the best, plan for the worst"0
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