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

Paul_Herring

littlekitty wrote: »

I don't know where you got your tax bands from, but they are incorrect.

From the HM Revenue and Customs Site:



Would be nice if higher rate was really over £41K, but it just isn't true!!

You're totally misunderstanding that table on the HMRC website, which doesn't include the tax-free allowance.

The higher rate does indeed start (for most) when you earn over £41K. If you don't get a P2 (so assuming your tax free amount is £5435) this year, you get taxed:

0% - 0 - £5435
22% - £5435 - (£5435+36,000) = £41,435
40% - (£5435 + £36,000) = £41,435 +


Which is what the other table is telling you. If anything is wrong with it it's the fact that it doesn't explicitly point out that your tax free amount may not be what I've assumed above, so the actual numbers may differ slightly.

StevenP_2

Ok guys

im on £18135


Am i better or worse off ?

I live with my partner who is on £17500 we have no kids and arent aware that there is anything we can claim.....


Steve

Meltdown_2

And to make things clear, if your earnings were £7,455 last tax year and this;
last year, your income tax bill was 10% on £2230 i.e. £230
this year, your income tax bill is 20% on £2020, i.e. £404.
In other words, you are £174 worse off.

Er, sorry, Messrs. Brown & Darling, is that calculation too hard for you ...
(Not everyone is entitled to your benefits ...)

icefall

What is the government thinking of? Not the voters obviously...

Meltdown_2

StevenP wrote: »

Ok guys im on £18135 Am i better or worse off ?
I live with my partner who is on £17500 we have no kids and arent aware that there is anything we can claim.....
Steve

Total income tax due last tax year for both of you = £2571 + £2432 = £5003

Total income tax due this tax year for both of you = £2540 + £2413 = £4953

(Strictly speaking I should take interest on savings into account, but I am assuming this isn't enough to put you into a higher tax bracket - it would have to be over £20K interest.)

So overall you are £50 per annum better off (just under £1 per week).
Don't go spending it all at once ...
Perhaps save it in a cash ISA ...;)

Mikeyorks

littlekitty wrote: »

I don't know where you got your tax bands from, but they are incorrect.

Same place you got your's from ..... only the article interpreted them correctly!

You've quoted the taxable bands ..... now go back and look at the allowances bands. Same page ... table immediately above, on the HMRC page. Then you add one to the other ..... and get the result first quoted?:p

Nomad25

I have a dufus question. I am self-employed and my y/e is March. Out of interest, do I calculate my tax burden [payable in July] using the old figures or the latest?

gordeaux

get rid of this labour government next time round- dare I say it but the conservatives seem to be listening to the bottom end as Labour did with businesses and white collar workers in 1997.
Something has got to be better than new labour in grabbing mode- they already filched the pension pot during their 1st year in power.

gordeaux

get rid of this labour government next time round- dare I say it but the conservatives seem to be listening to the bottom end as Labour did with businesses and white collar workers in 1997.
Something has got to be better than new labour in grabbing mode- they already filched the pension pot during their 1st year in power.
I vote martin for the next prime minister.

firebird1

simongregson wrote: »

Well, I am happy to be on the positive side of the graph. But I can't help but feel that there is something wrong with the worst paid workers being worse off, especially with the effect of other bills rising.

,
,
,
Hi Simon,

What will happen is, every one who was around the £7500 pa level will simply just throw the job, and claim benefits.

G.