April 2008 Income Tax and NI Changes: How will they affect you?

Paul_Herring

nogdude wrote: »

Hey, from May 18 2008, all those who earn more than £34600 will get a bonus as the 40% tax bracket is shifting upwards. Meaning if you earn £36000 or above, you pay £280 less tax in the year... good old Labour, Kick the poor in the teeth and when they are down.... and then kick them again.

1) The limit isn't £34600, it's £34600 plus your nil-rate band (£40K-odd for most people.)
2) On the downside, the UEL for NI is increasing, so you pay 10% more on more of your income.

Meltdown_2

dc wrote: »

Despite the platitudes ( I feel a con coming on)

You are not the only one! :rolleyes:

They failed to realise that ALL retired women from 60 till 65 would be £223 worse off, durr..

And not only women. A number of men are retired early between 60 and 65.
The proposed government solution : extend a flat-rate payment to this group. But these flat-rate payments go to the very rich as well as the very poor! :rolleyes2

That people in their 50's with redundancy packages on low early pensions would be affected.

And GB/AD have no intention (it seems from what they have said in public) to do anything at all for this group

nicko33

nogdude wrote: »

Hey, from May 18 2008, all those who earn more than £34600 will get a bonus as the 40% tax bracket is shifting upwards.

May 18th ?
April 6th surely

were you looking at something like this
http://www.hmrc.gov.uk/forms/p7x.pdf

nogdude

This is what I have in my payroll software... they are usually guided by HMRC

Still not right when ever it takes place.. ??:mad:

nogdude

I don't think some people understand the way tax is calculated

If your tax code is 543L, it means you can earn £5435 before you pay tax. Say you earn £15000:

Take £5435 from £15000, leaves you £9565, this taxed at 20% means you pay £1913 in tax a year.

The 40% bracket is similar, but if you go over the limit say its £36000 you pay 40% on any money earnt over that amount.

ie paid £36100... take the £5435 from the £36000 leaves you £30565 taxed at 20% = £6113 tax

You then pay 40% on any £ above the limit, in this case £100 therefore another £40 in tax.

Total tax paid in the year... £6153

I hope that helps )

Meltdown_2

nogdude wrote: »

I don't think some people understand the way tax is calculated

Gordon Brown, Alistair Darling, ...;)

nicko33

not sure if this makes it any clearer or not
http://www.paypershop.com/news-cat/prebudget-2007-257.html

does it mean that tax will initially be deducted as if the old thresholds were in force,
but by the end of the year, the net effect will be that the new thresholds applied for the whole year?

Clowance

that NI is calculated compared to tax, this applies to casual workers (I am a bank secretary in the NHS) and people who dont get paid every week of the year; perhaps becuase they are on termtime contracts. For example, you have an allowance of about £90 per week before you pay NI. If you work but for some reason your timesheet doesn't go in in time, so that two weeks pay goes in at once, you lose the £90 allowance on the first week and pay full NI on it (11%). This has happened to me again over the last two weeks, and as a low earner I am already one of the worse off. Last year I paid about £185 more in NI than if it had been averaged over the whole year, and this was on an income of less than £7000.
Income Tax is averaged over the year and is therefore fairly applied to total earnings.
:mad:

mbs1

according to that i "should" be £110 better off this year if i earn the same as i did last year...

Bonus!

Poosmate

Yay! I'm going to be £15 a year better off - £1.25 per month.

I'm still not going to vote for Labour though!

I wonder if William Hill will run a book on GB ever making a right decision? I guess the odds would be pretty good!

Poo