Tax Bands

TheEditor_2

Hi,

I've got a really basic question, sorry if it's been posted elsewhere - i've been searching the web for the answer, but no luck.

Tax bands, I understand that there are 3, but if I go over one band and enter another, does the total profit get taxed at that amount or is the taxation done in bands as well.

For example if I went a quid over the threshold of one band to another, would I be taxed 10% for the majority, and at 22% for the £1? or would the TOTAL profit be taxed at 22% as the threshold was crossed?

Thanks for your help in advance...

TheEd.:T

CLAPTON

the first 5225 is tax free
the next 2230 is taxed at 10 %
then the next 32370 is taxed at 22%
then everything above is taxed at 40%

so if you earn 5226 you get taxed at 10% of £1 = 10p

if you earn 7456 you get taxed
at 10% of 2230 = 223
plus 22% of £ 1 = 22p
so total tax £223.22

[Deleted User]

Hi,

you say 'total profit', so are you talking about profit from a business, or do you mean earnings gained through employment?

TheEditor_2

Thanks clapton, all clear... cheers!