Understanding my tax bracket and the way it works

Simon_B_2

Hello

6 months ago i moved from a 14K job to a 22K job and am currently paying 22% tax and national insurance together on my paycheck.

I'm currently on a 522L code, surely if i have the £5225 the percentage would be lower over the year? or would the change in pay effect this.

Should i expect a decrease in tax monthly in the new financial year?

And is it worth doing a self assessment form?

Sorry for the barage of questions.

tigtag02

Currently you can earn £5225 tax free
You are taxed at 10% on the next £2330 and then 22% on the rest (we dont need to worry about 40% as you dont earn enough)

Next year your tax free allowance will increase to £5435 and then everything over at 20% (up to the 40% bracket)

HTH

jem16

Simon_B wrote: »

Hello

6 months ago i moved from a 14K job to a 22K job and am currently paying 22% tax and national insurance together on my paycheck.

I'm currently on a 522L code, surely if i have the £5225 the percentage would be lower over the year? or would the change in pay effect this.

Your tax bracket is calculated on how much taxable income you have. At the moment the first £5225 is tax-free. The next £2230 is taxed at 10%. From £2231 to £34,600 is taxed at 22%. Anything over that is taxed at 40%.

As you can see you fall into the 22% bracket.

You will pay more tax simply because you are earning more money but your net monthly pay will increase.

Should i expect a decrease in tax monthly in the new financial year?

Your personal allowance goes up to £5435 in the new tax year. The 10% bracket is being abolished and the 22% bracket becomes 20%. You will probably pay a bit less tax because of this.

And is it worth doing a self assessment form?

No. Your tax affairs sound simple and you are on the correct code. Everything is worked out automatically.

CLAPTON

you get 5225 tax free on your yearly salary
after that you pay 10% on the next 2230
then you pay 22% on the rest

you get the first £ 435 free of NI per month then you pay 11% on the rest

so your marginal deduction are tax iat 22% plus 11% NI i.e. 33%

but it depends upon the details i'm afraid.

if you want to give the full details we could check that they are correct

Simon_B_2

Thanks to you all for putting it so clearly :money:

Which details would you need, i'm currently considering changing from my own car to company which will bring my overall pay down a few of thousand as well but this won't be till after the end of the financial year.

I'd just like to get a snapshot of my monthly income for the next financial year

Simon_B_2

hey if the 11% NI and 20% Tax details are correct than i've done the calcs myself thanks again

CLAPTON

what question are you asking?

if you want to know whether your tax is currently correct then post everything on you lastest payslip