Tax bands (Tax free, 20% and 40%)

[Pulse]

Ok, can someone help?

Based on 44k a year, I think it works like this (roughly):

6k tax free
then the amount up to 35k (29k) is taxed at 20%
then the amount up to 44k (9k) is taxed at 40%

He thinks, again based on 44k a year:

20% tax up to 35k a year
then a tax free amount of 6k, taking you up to 41k
then taxed at 40% on the rest (3k)

Can someone please prove me right?

[Vixpy1]

Pulse said:

Ok, can someone help?

Based on 44k a year, I think it works like this (roughly):

6k tax free
then the amount up to 35k (29k) is taxed at 20%
then the amount up to 44k (9k) is taxed at 40%

He thinks, again based on 44k a year:

20% tax up to 35k a year
then a tax free amount of 6k, taking you up to 41k
then taxed at 40% on the rest (3k)

Can someone please prove me right?

6K tax free,
The next 35K at 20%
Then 40% on the rest

[northandy]

Vixpy1 said:

6K tax free,
The next 35K at 20%
Then 40% on the rest

^^^ what he said +1

[Pulse]

So you'd only get taxed at 40% on the remaining 3k?

[Steve996]

http://www.hmrc.gov.uk/rates/it.htm

My understanding;

Tax free allowance - 1st 6035
Then next 34800 taxable income at 20%
Then everything else at 40%

[Vixpy1]

Pulse said:

So you'd only get taxed at 40% on the remaining 3k?

Yes, subject to your tax code

[dodgyviper]

Pulse said:

Ok, can someone help?

Based on 44k a year, I think it works like this (roughly):

6k tax free
then the amount up to 35k (29k) is taxed at 20%
then the amount up to 44k (9k) is taxed at 40%

He thinks, again based on 44k a year:

20% tax up to 35k a year
then a tax free amount of 6k, taking you up to 41k
then taxed at 40% on the rest (3k)

Can someone please prove me right?

Its the first scenario - I don't get your post to be honest - who's 'he' (or are you working in the 3rd person?). Also you've given us 2 scenarios, then asked if you're right. Erm which one is yours?

[Asterix]

Dunno how valid this is now but maybe worth a go...

http://www.ir35calc.co.uk/TargetIncomeCalculator.a...

[H_Kan]

Assuming you don't recieve benefits like medical insurance or car allowance etc which affect your tax code then you should get around £6k tax free.

The next £35k is at 20% and the final £3k will be at 40%.

[dodgyviper]

Steve996 said:

http://www.hmrc.gov.uk/rates/it.htm

My understanding;

Tax free allowance - 1st 6035
Then next 34800 taxable income at 20%
Then everything else at 40%

I think the personal allowance comes out of the 35k.

ie

6k is not taxed
35-6k is taxed at 20%
>35K is at 40%

[ACEparts_com]

Channel islands = tax free £8k, then 20% and that's it. My understanding is that isle of man earnings above a certain amount are even tax free.

[eyebeebe]

Hate to break it to you but you're missing National Insurance out.

Roughly speaking the boundaries are the same so you need to add a further 11% on to the 20% and 1% onto the 40%

[talkssense]

Wow! You guys really need to move.

Our tax allowance is just short of £28,000 (my wife doesn't work, so I get hers too)we get tax relief on all mortgage interest paid in addition to the standard allowance of £9,200 each.

So no tax on first £28,000, 10% on the next £21,000, and 18% on anything above that to a cap of 100k. ie no one pays more than 100k income tax regardless of income.

http://www.gov.im/treasury/incometax/sections/empl...

[Tuscan Tart]

Pretty close Vixpy, exact figures are:

Salary of £44,000
less PA of £6035 leaves taxable pay of £37,965
20% on £34,800 Tax £6960
40% on £3165 Tax £1266

Total tax payable is £8226