Income Tax Question

planemad

With UK income tax dropping to 20% for everyone from tomorrow will you be better off?

Just a few questions: For example say I earn 25K per year currently was all that amount taxed at 22%? or was the first 8k taxed at 10% then the following 17k at 22%.

I just really want to under know if I will pay less tax in next months pay?

Thanks in advance.

Aegis

Last year the first £5225 was paid tax free, the next £2230 was at 10% and the balance up to a total of £39825 was taxed at the basic rate of 22%.

Essentially the new tax rules means that for the old basic rate band, you lose 2% less of your earnings to tax, but in the band that was the old lower rate you will pay an additional 10% more.

If anyone's interested, I'll work out when you'll earn more and when you'll earn less under the new system when I get back. I quite enjoy maths, but have to pick up my new RAM from the post office (baaa!!)

heat0410

Try this following website and it will show whether you will be better off.

www.listentotaxman.com

Heat

merlinthehappypig

I'm about £70 a year worse off after the 10% band goes.

Kay_Peel

Those earning between £18,000 and £35,000 will be a little bit better off to the tune of a fiver a month HOWEVER these gains will be well and truly wiped out by new National Insurance rules.

(Those National Insurance didn't get much publicity, did they?)

A person under 65, earning less than £10,000, will be £2 week worse off. This mainly effects people like students, who are paying their way through University, and those living on pensions.

The basic rate of tax was reduced from 22 to 20% and it was paid for by the loss of the 10% rate. The National Insurance changes didn't get the same attention and may have slipped under the radar.

It's smoke and mirrors really.

[Deleted User]

I remember looking at a really useful graph when this news first broke, now I just need to find it again!

EDIT: good old bbc news:

http://news.bbc.co.uk/1/hi/business/6479145.stm

or for the graph only:

http://newsimg.bbc.co.uk/media/images/42714000/gif/_42714295_inc_tax_nic_compare_416gr.gif

MickHG

Hi, You might like to copy this if interested !

---

Extra Tax to be Paid by Low Earners due to change in 2008 Tax Rate
from 22% to 20%
Earnings---Tax @ 20%----Tax @ 22%----Extra Tax to pay up to 18K Income
5K

---

£0

---

£0

---

£0
6K

---

£155

---

£78

---

£78
7K

---

£355

---

£178

---

£178
8K

---

£555

---

£343

---

£212
9K

---

£755

---

£563

---

£192
10K

---

£955

---

£783

---

£172
11K

---

£1,155

---

£1,003

---

£152
12K

---

£1,355

---

£1,223

---

£132
13K

---

£1,555

---

£1,443

---

£112
14K

---

£1,755

---

£1,663

---

£92
15K

---

£1,955

---

£1,883

---

£72
16K

---

£2,155

---

£2,103

---

£52
17K

---

£2,355

---

£2,323

---

£32
18K

---

£2,555

---

£2,543

---

£12
19K

---

£2,755

---

£2,763

---

£8
20K

---

£2,955

---

£2,982

---

£27
21K

---

£3,155

---

£3,203

---

£48
22K

---

£3,355

---

£3,423

---

£68
23K

---

£3,555

---

£3,643

---

£88
24K

---

£3,755

---

£3,863

---

£108
25K

---

£3,955

---

£4,083

---

£128

NB:- This chart is based on a single person’s Earnings
Extra Tax to pay shown in Red
Good Old Gordon.
Regards Mick