How much more tax?

kinger101

sultan123 said:

What would be the difference between earning 100k in last tax year vs till 2026 then.

As the PA freeze till 2026 only started this tax year right?

Fiscal drag......

https://www.investopedia.com/terms/f/fiscal-drag.asp

calcotti

sultan123 said:

What would be the difference between earning 100k in last tax year vs till 2026 then.

Don’t know what you are asking, see.   

penners324 said:

If the allowances stay the same and your salary stays the same and the tax and ni rates stay the same for the next 4 years then your take home pay will stay the same

But of course how much you can buy with it will be less due to inflation.

sultan123

calcotti said:

sultan123 said:

What would be the difference between earning 100k in last tax year vs till 2026 then.

Don’t know what you are asking, see.   

penners324 said:

If the allowances stay the same and your salary stays the same and the tax and ni rates stay the same for the next 4 years then your take home pay will stay the same

But of course how much you can buy with it will be less due to inflation.

How much worse off am I earning 100k in 2021 vs 2022 due to PA freeze

calcotti

sultan123 said:

calcotti said:

sultan123 said:

What would be the difference between earning 100k in last tax year vs till 2026 then.

Don’t know what you are asking, see.   

penners324 said:

If the allowances stay the same and your salary stays the same and the tax and ni rates stay the same for the next 4 years then your take home pay will stay the same

But of course how much you can buy with it will be less due to inflation.

How much worse off am I earning 100k in 2021 vs 2022 due to PA freeze

You keep asking the same question. The answer is the same. If your income is the same, the PA is the same and the rate of tax is the same then the amount of tax you pay is the same. 

However the value of the money you take home decreases with inflation - that has nothing to do with taxation. At 10% inflation every £1000 you take home now only allows you to purchase goods that would have cost you £910 a year ago.

penners324

sultan123 said:

calcotti said:

sultan123 said:

What would be the difference between earning 100k in last tax year vs till 2026 then.

Don’t know what you are asking, see.   

penners324 said:

If the allowances stay the same and your salary stays the same and the tax and ni rates stay the same for the next 4 years then your take home pay will stay the same

But of course how much you can buy with it will be less due to inflation.

How much worse off am I earning 100k in 2021 vs 2022 due to PA freeze

You'll be paid exactly the same

sultan123

penners324 said:

sultan123 said:

calcotti said:

sultan123 said:

What would be the difference between earning 100k in last tax year vs till 2026 then.

Don’t know what you are asking, see.   

penners324 said:

If the allowances stay the same and your salary stays the same and the tax and ni rates stay the same for the next 4 years then your take home pay will stay the same

But of course how much you can buy with it will be less due to inflation.

How much worse off am I earning 100k in 2021 vs 2022 due to PA freeze

You'll be paid exactly the same

Apologies I might be getting confused but I meant tax year where PA was not frozen vs not frozen

Dazed_and_C0nfused

sultan123 said:

penners324 said:

sultan123 said:

calcotti said:

sultan123 said:

What would be the difference between earning 100k in last tax year vs till 2026 then.

Don’t know what you are asking, see.   

penners324 said:

If the allowances stay the same and your salary stays the same and the tax and ni rates stay the same for the next 4 years then your take home pay will stay the same

But of course how much you can buy with it will be less due to inflation.

How much worse off am I earning 100k in 2021 vs 2022 due to PA freeze

You'll be paid exactly the same

Apologies I might be getting confused but I meant tax year where PA was not frozen vs not frozen

Well that depends on how much it changed by, simplistically if it was reduced (highly unlikely but not impossible) you would pay more tax.

If was increased you would pay less tax.

But if it increases to £12,580 it would be a negligible reduction.  If it increased to £13,500 it would be much more noticeable.

calcotti

sultan123 said: Apologies I might be getting confused but I meant tax year where PA was not frozen vs not frozen

Even when the allowance is not frozen there is no formula to the change, it’s down to the government to change it as and when and by how much each time it makes the change. You are asking us to compare our world with a parallel universe which is pointless. 

Jeremy535897

I agree it is pointless, although actually tax rates and allowances increase by CPI each year by virtue of section 21 ITA 2007, unless the Chancellor decides otherwise.

calcotti

Jeremy535897 said:

I agree it is pointless, although actually tax rates and allowances increase by CPI each year by virtue of section 21 ITA 2007, unless the Chancellor decides otherwise.

I wasn’t aware of that - perhaps because history indicates that the Chancellor does indeed frequently decide otherwise!