View Full Version : Income tax bands
I never knew they were reducing the amount you needed to earn to qualify for the 40% tax band!
For 2010 - 2011
20% = £0 - £37400
40% = £37400 to £150000
50% = £150000+
For 2011 - 2012
20% = £0 - £35000
40% = £35000 to £150000
50% = £150000+
http://www.hmrc.gov.uk/rates/it.htm
So from April for everyone earning over the £35k, instead of getting 80% of your bonus AND car allowance... you will now only get 60% of it
Not to mention only getting 60% of that £2400 instead of 80% of it! So about £40 a month worse off when it kicks in, not including loosing 20% of your car allowance and bonus.
Nice
timwilky
20-01-11, 03:28 PM
Having been a higher rate payer for god knows how long. I really wish I was in the new 50% bracket. What sounds like a good salary increase etc. is peanuts once the government grabs their chunk.
Also isn't it about time personal allowances were increased to reflect the true cost of living. something is wrong when a person on the national minimum wage has to pay income tax on a weeks earnings.
Serves you right for being corporate fat cats :p
Specialone
20-01-11, 03:31 PM
Must be really tough getting stopped a bit more money out of your £50k + salaries :rolleyes:
No worries for me, i have earnt £100 this week thus far.
What sounds like a good salary increase etc. is peanuts once the government grabs their chunk.
Thats what I was working out when I came across the tand band figures.
My 2.5% January pay rise on paper looks great, until after the taxman has finished playing around in April.
I didn't get a pay rise. I'm firmly in the 20%. Quit bitching.
Must be really tough getting stopped a bit more money out of your £50k + salaries :rolleyes:
Tax band figures are before tax. :confused:
So an extra tenner is being taken from your £670+ weekly earnings. It's hardly going to put you in the poor house is it??
Tax band figures are after your personal allowance too. So you don't get taxed 40% until you earn over £40k a year.
Luckypants
20-01-11, 03:51 PM
It appears they are doing this to prevent 40% tax payers benefiting from the £1000 increase in personal allowance. Apparently tax neutral for higher rate payers, but I would like to see the figures on that, because to make it neutral surely the threshold just comes down by 1K?
By the shift in tax bands and NI next year I'll actually be £300 better off :)
You only get the higher tax band on anything you earn over the threshold. Or am I wrong?
Specialone
20-01-11, 04:03 PM
Tax band figures are before tax. :confused:
And your point is?:confused:
Im earning 50 pence a year atm, so i wont pay anything at this rate.
Having been a higher rate payer for god knows how long. I really wish I was in the new 50% bracket. What sounds like a good salary increase etc. is peanuts once the government grabs their chunk.
Also isn't it about time personal allowances were increased to reflect the true cost of living. something is wrong when a person on the national minimum wage has to pay income tax on a weeks earnings.
You a fat cat Tim?
Thought I'd got a decent payrise this month, first one in a couple of years, till I looked at RPI & CPI.
454697819
20-01-11, 04:09 PM
You only get the higher tax band on anything you earn over the threshold. Or am I wrong?
correct
its not so ****ty
try
listentotaxman.com
And your point is?:confused:
Im earning 50 pence a year atm, so i wont pay anything at this rate.
It wasn't directed at you. It was directed at those moaning about being taxed at 40%. By just stating the tax bands it gives the impression that anyone earning over 35k will now be taxed at 40% on their earnings above that, where in fact it will only be on their earnings above 40 something K and therefore is not as bad as sounds.
You only get the higher tax band on anything you earn over the threshold. Or am I wrong?
Correct. It's cumulative.
Specialone
20-01-11, 04:14 PM
It wasn't directed at you. It was directed at those moaning about being taxed at 40%. By just stating the tax bands it gives the impression that anyone earning over 35k will now be taxed at 40% on their earnings above that, where in fact it will only be on their earnings above 40 something K and therefore is not as bad as sounds.
Yes mate i know how it works, you still need to earn over that figure for it to affect you though.
EssexDave
20-01-11, 04:15 PM
The draft finance bill 2011 shows the personal allowance increasing from £6,475 to £7,475 meaning if you're in the lower band, you will get an extra ~£220pa. (Just under £20pm)
The 40% band is being moved from £37,400 to £35,000. So in essence, they will be taxed on £1,400 more. (Because of the £1,000 increase in personal allowance). However, the biggest impact of this, will be child benefit etc. If you ear 43,000pa dead on, currently you'd be in the 20% band. However, with the change, you would be in the higher band. This would mean that you now wouldn't receive any child benefit either, as well as the small increase in tax.
I'm sure there will be more cuts to benefits for the people in these limits after the new "one benefit fits all" malarkey comes out.
EssexDave
20-01-11, 04:18 PM
By the shift in tax bands and NI next year I'll actually be £300 better off :)
Until you take into account the2.5% increase taken on any "luxury items" you spend on. Including bike protective gear (other than helmets) and bottled water, chocolate biscuits or pretty much anything other than the bare essentials. Fuel, you'll already be paying about 4-5p a litre more than a few months ago, with more duty increases in April and possibly again later in the year.
You've then got inflation at 3.3% and with shops increases some prices to cover up losses elsewhere, that £300 probably doesn't look to good.
Yes mate i know how it works, you still need to earn over that figure for it to affect you though.
Hence why I said it wasn't directed at you...
Until you take into account the2.5% increase taken on any "luxury items" you spend on. Including bike protective gear (other than helmets) and bottled water, chocolate biscuits or pretty much anything other than the bare essentials. Fuel, you'll already be paying about 4-5p a litre more than a few months ago, with more duty increases in April and possibly again later in the year.
You've then got inflation at 3.3% and with shops increases some prices to cover up losses elsewhere, that £300 probably doesn't look to good.
I know I know I know lol. I was just trying to be positive :)
benji106
20-01-11, 04:22 PM
It appears they are doing this to prevent 40% tax payers benefiting from the £1000 increase in personal allowance. Apparently tax neutral for higher rate payers, but I would like to see the figures on that, because to make it neutral surely the threshold just comes down by 1K?
Say whaaat? I got my letter through with my new tax code and my personal allowance has gone up £20 as far as I can make out :confused:. From 000611L to 000613L. So my previous PA was £6,110 and now its £6,130 right?
Changes dont come in until April.
You only get the higher tax band on anything you earn over the threshold. Or am I wrong?
correct
benji106
20-01-11, 04:44 PM
Ah right, just testing ;)
Cheers
Biker Biggles
21-01-11, 01:57 PM
More stealth taxes.I blame Gordon Brown.We should get rid of him ASAP.
Jimmy2Feet
21-01-11, 02:22 PM
More stealth taxes.I blame Gordon Brown.We should get rid of him ASAP.
???
Biker Biggles
21-01-11, 02:33 PM
Its my warped sense of ironic humour mate.
Dave20046
21-01-11, 05:59 PM
You only get the higher tax band on anything you earn over the threshold. Or am I wrong?
You are correct, was just about to say this.
So G if you're on 35k and your 2.5 % payrise puts you up to £35,352.50 you'll be paying 40% on that £352.50....
Imagine that's good news if you were expecting to be giving away 40% of your £35 odd k
MisterTommyH
21-01-11, 06:15 PM
So if you're on £34500 you're in the 20% bracket. You get a £1k rise and end up on $35500 in the 40% bracket......
Could you end up in a position where you get a payrise and take less home;
Whats the optimum amount beneath £35000 to earn to do this; and
How much about £35000 would you have to get to make that payrise worth it?
I don't really understand payroll stuff. I just know they put the decimal point in the wrong position every month.
Dave20046
21-01-11, 06:18 PM
So if you're on £34500 you're in the 20% bracket. You get a £1k rise and end up on $35500 in the 40% bracket......
Could you end up in a position where you get a payrise and take less home;
Whats the optimum amount beneath £35000 to earn to do this; and
How much about £35000 would you have to get to make that payrise worth it?
I don't really understand payroll stuff. I just know they put the decimal point in the wrong position every month.
Did you read my post above? In your example only £500 is over the threshhold and liable to 40% taxation. You still pay your 20% on the rest.
MisterTommyH
21-01-11, 06:20 PM
Lol,
Yeah I read it, typed it, and the didn't understand it until after I'd posted.
I was thinking that no one would ever want the payrise if that could happen. Knew it couldn't be right, but couldn't see how else it worked.
Think I understand it now though.
I get it now, clearly didn't understand the system before.
It's not all bad for me afterall thank god. At the moment I have been paying £30 a month to the taxman in company car tax when I technically don't have a company car. So I'm due a £240 rebate in April(I won't be holding mr breath though:(), so from April I should be £30 better off when my tax code resets, £17 better of from the allowance increase and £60 better of from my payrise. £107 in total woop.
Imagine if you worked hard enough to earn £1m, to only end up getting 60% of £850000... Damn that would **** you off, it's no wonder people leave for tax havens!
-Ralph-
21-01-11, 07:39 PM
Hmmm, CIE, then this, sneak it through seems to be the new governments policy on new legislation/changes.
kwak zzr
21-01-11, 10:08 PM
I see this government are doing a great job!
I havent heard much good come from them,
roll on election time.
Specialone
21-01-11, 10:13 PM
I see this government are doing a great job!
I havent heard much good come from them,
roll on election time.
Dont say that Daz, theyre only doing it becasue of the previous regimes mis-management of uk coffers, so vote them out and the problem is back.
The popular governments are always the ones who dont have to make difficult decisions, if we dont stop the rot now, we are doomed.
kwak zzr
21-01-11, 10:17 PM
I see they have already agree'd to sell off the company i work for.
Specialone
21-01-11, 10:45 PM
I see they have already agree'd to sell off the company i work for.
Yeah and that would have happened even if labour stayed in.
You are correct, was just about to say this.
So G if you're on 35k and your 2.5 % payrise puts you up to £35,352.50 you'll be paying 40% on that £352.50....
Imagine that's good news if you were expecting to be giving away 40% of your £35 odd k
Wrong! It's your personal allowance and then 35k on top.
Bluefish
21-01-11, 10:57 PM
I see this government are doing a great job!
I havent heard much good come from them,
roll on election time.
what so labour can come back in, and it start all over again ffs.
454697819
21-01-11, 11:25 PM
guys,
use
listentotaxman.com
it works really well and reflects the changes, you can add all sorts in, it helps me no end when HMRC and my company get it wrong as they so often do....
guys,
use
listentotaxman.com
it works really well and reflects the changes, you can add all sorts in, it helps me no end when HMRC and my company get it wrong as they so often do....
It's good, I always use that but it's not got the 2011/2012 tax year on yet.
I'm dreading sorting out my tax code bullcrap. I have a car on an ECOS scheme through work so I shouldnt pay company car tax, and I've not had a company car since august. I just know it's going to be hardwork getting my money back after my brief phone conversation with them yesterday.
It's good, I always use that but it's not got the 2011/2012 tax year on yet.
I'm dreading sorting out my tax code bullcrap. I have a car on an ECOS scheme through work so I shouldnt pay company car tax, and I've not had a company car since august. I just know it's going to be hardwork getting my money back after my brief phone conversation with them yesterday.
phone your local tax office and get your tax code changed now, means you can get the rebate before the year ends.
When I use to deal with the company cars at my old job, HMRC only use to deal with the P46(car) forms every quarter and that's if your company have notified them!
Call them up tell them the date you gave back the car and tell them you want your code changing now! If you get an unhelpful person (as you sometimes do!) hang up and call again- its what I use to do.
Our local tax office use to do it for our drivers
timwilky
22-01-11, 10:21 AM
Thanks for that advice Lilly, my car went back on Thursday
punyXpress
22-01-11, 11:38 AM
Why all the fuss?
In 1965 a pal was paying 91% + 15% unearned income + N.I., so the more he earned the less he got!
phone your local tax office and get your tax code changed now, means you can get the rebate before the year ends.
When I use to deal with the company cars at my old job, HMRC only use to deal with the P46(car) forms every quarter and that's if your company have notified them!
Call them up tell them the date you gave back the car and tell them you want your code changing now! If you get an unhelpful person (as you sometimes do!) hang up and call again- its what I use to do.
Our local tax office use to do it for our drivers
I called but they wanted so much information.
They have the detail of the Clio I had and I gave them the date that went back, but I had a fiesta for 1 month and they want all the info on that too, and I don't have the P11d for it so will have to wait until April when my previous company updates them :(
I just called my local tax office and gave them all the details from my last 2 company cars, dates returned etc. Then told them I've not had a company car since the 27/07/1010.
They said my tax code will change and I should get a tax refund in my next pay packets, does anyone know if that is right? or whether I will get it at the end of the tax year 5/4/2011... as the lady on the phone didn't sound to sure, and it seemed way to easy.
Gazza77
22-01-11, 06:39 PM
I just called my local tax office and gave them all the details from my last 2 company cars, dates returned etc. Then told them I've not had a company car since the 27/07/1010.
They said my tax code will change and I should get a tax refund in my next pay packets, does anyone know if that is right? or whether I will get it at the end of the tax year 5/4/2011... as the lady on the phone didn't sound to sure, and it seemed way to easy.
I would imagine it depends upon how quickly HMRC notify your payroll dept. They haven't got long to do it to get it done via your pay in 10/11 tax year.
It will only be about £250 so not earth shattering, just principle more than anything, my payroll department are pretty good so we'll see.
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