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22 Nov 20, 09:35 PM |
#1
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Imagineer
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Income Tax bands
I’ve been retired for a while and I’ve lost track. Could do with some clarification please of the HMRC website.
The personal tax-free allowance (for people earning less than £100k) is £12,500. Then a rate of 20% tax applies upto a max of £37,500. Then, 40% from £37501 (to another max). Does this mean that on earnings of £50,000 (for example) - the first £12,500 is tax free -the chunk from £12,500 to £37,500 (being £25,000) is taxed at 20% - and the chunk from £37501 to £50,000 (ie £12,499) is taxed at 40% ? Thanks Edited at 09:36 PM. |
22 Nov 20, 09:42 PM |
#2
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Imagineer
Join Date: Oct 09
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22 Nov 20, 09:47 PM |
#3
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VIP Dibber
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Nope...
Your personal allowance is £12,500 and on that you pay nothing. Basic rate tax is paid on earnings between £12,501 and £50,000 at 20% (that is £37,500 of 20% ). Higher rate tax is paid on earnings of £50,001 to £150,000 at 40% Additional rate tax is paid on earnings over £150,000 at 45% Hoping that this clarifies things.
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2005 onwards.. lots of times! Index of all my Trip and Pretrip reports..https://www.thedibb.co.uk/forums/sho...6#post15662196 Edited at 09:53 PM. |
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22 Nov 20, 09:48 PM |
#4
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Thread Starter
Imagineer
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Thanks. I didn’t realise the 40% tax rate kicked in on earnings over £37,500, I’ve always assumed it was over earnings somewhere in the £40,000 bracket.
Edited at 09:49 PM. |
22 Nov 20, 09:49 PM |
#5
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Imagineer
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Not spot on
It’s 20% up to £50,000. So £12,500 at nothing, then £37,499 at 20%. Someone who earns £50,000 will pay no higher rate tax at all
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Mitch xx Edited at 09:51 PM. |
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22 Nov 20, 09:49 PM |
#6
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Imagineer
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Mitch xx |
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22 Nov 20, 09:52 PM |
#7
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Thread Starter
Imagineer
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22 Nov 20, 09:53 PM |
#8
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Imagineer
Join Date: Oct 09
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Oops sorry EM and all more up to date peeps
On the naughty step Disney332
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22 Nov 20, 10:00 PM |
#9
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Imagineer
Join Date: Jan 09
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Just for info: The Income between 100 and 123k is effectively taxed at 60% because you lose the personal allowance.
Earnings from 124k you're taxed at 40% until next band
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Unbelievable sights, indescribable feelings - Florida with an 11 month old and a 2 year old! DLP - Two parks, One Day, Oh and Two Toddlers We're going on a bear hunt - New England trip Edited at 10:02 PM. |
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22 Nov 20, 10:01 PM |
#10
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Imagineer
Join Date: Oct 09
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If you earn £50,000 the first 12500 is tax free.
The next 37,500 is taxed at 20% Forget the 40% it will not apply if earning £50,000 Disney332
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