Stupid question about Tax bands...

Guru · 23 Nov 2011 at 20:36

Hi all,

I'm looking for a new job at the moment and the figures I'm looking at are all around the point when the tax changes to 40%.

What I'm wondering is.... is it only the bit you earn over the £35,000 threshold that you get taxed the higher rate on? or does your whole pay check get bummed?

I'm looking at jobs for £33,000-£40,000 so I'm interested to know having never had to worry about this previously.

Thanks,

G

Strife212 · 23 Nov 2011 at 20:44

What I'm wondering is.... is it only the bit you earn over the £35,000 threshold that you get taxed the higher rate on? or does your whole pay check get bummed?

Yes, otherwise earning £1 more would screw you over.

Vonhelmet · 23 Nov 2011 at 20:45

Only the bit above.

DBT85 · 23 Nov 2011 at 20:48

I'm glad you asked rather than just assuming the worst. The amount of people the believe that you get taxed on the whole lot at the same rate is actually quite scary. Some people have even claimed to refuse a payrise/promotion because of it.

EDIt: Isn't the tax % only actually on the money AFTER the personal allowance also? Or have I made that up? So you only start paying 40% tax from about £43k

EDIT 2: yes it is. So you only start paying 40% tax once you breach £42,400. Check the link to see exactly what you pay.

http://listentotaxman.com/index.php

Vonhelmet · 23 Nov 2011 at 20:57

Todge said:
I'm glad you asked rather than just assuming the worst. The amount of people the believe that you get taxed on the whole lot at the same rate is actually quite scary. Some people have even claimed to refuse a payrise/promotion because of it.

EDIt: Isn't the tax % only actually on the money AFTER the personal allowance also? Or have I made that up? So you only start paying 40% tax from about £43k

EDIT 2: yes it is. So you only start paying 40% tax once you breach £42,400. Check the link to see exactly what you pay.

http://listentotaxman.com/index.php

Yes.

jimjamuk · 23 Nov 2011 at 20:59

good grief - are you sure you should be applying for jobs in that salary range?

Vonhelmet · 23 Nov 2011 at 21:00

jimjamuk said:
good grief - are you sure you should be applying for jobs in that salary range?

Pipe down, smartarse.

Dunks · 23 Nov 2011 at 21:00

I still can't believe the amount of people I hear thinking that it's on the entire amount once they go over £x.

Pudney · 23 Nov 2011 at 21:20

Vonhelmet said:
Yes.

The correct answer was: it depends

Edit: which is of course my default answer to any tax question

jimjamuk · 23 Nov 2011 at 21:21

Vonhelmet said:
Pipe down, smartarse.

why - are people not able to find answers to questions like these by themselves - i reckon one google search and 2 minutes reading and a question like this should be childs play for someone who lets face it would be running for a job in the 30k+ salary bracket

at least if you are going to come onto a public forum have the basics knuckled down

antijoke · 23 Nov 2011 at 21:24

jimjamuk said:
at least if you are going to come onto a public forum have the basics knuckled down

Who stole the jam out of your username?

DBT85 · 23 Nov 2011 at 21:25

jimjamuk said:
at least if you are going to come onto a public forum have the basics knuckled down

You mean like capital letters and punctuation? Seriously?

jimjamuk · 23 Nov 2011 at 21:25

come again rubber ducky?

jimjamuk · 23 Nov 2011 at 21:34

Todge said:
You mean like capital letters and punctuation? Seriously?

Written by Todge in another thread

"and vat and the parcel force deliver fee.

and vat

and the parcel force deliver fee."

7/10 - no capital letter, two full stops but no sentance structure

Calm down - its a forum where content is king - I just cannot stand lazy questions. If you didnt agree with me then argue your points across - I'd respect that but dont try and climb on a high horse - especially in a public forum where I can search your posts in 30 seconds.

paddy · 23 Nov 2011 at 21:45

Strife212 said:
Yes, otherwise earning £1 more would screw you over.

Exactly. Having a tax system where just going £1 over a threshold means you pay the new band on the whole lot would be so stupid it would be almost unbelievable.

Wait... Stamp Duty... wussthatyousay?

:rolleyes:

jimjamuk · 23 Nov 2011 at 21:48

The current tax system is overly complicated - someone really needs to sit down and merge NI into the standard tax rate and simplify some of the rules so people can understand it a bit better

Vonhelmet · 23 Nov 2011 at 21:50

Pudney said:
The correct answer was: it depends

Edit: which is of course my default answer to any tax question

Of course, I didn't get into issues of married couples allowance, or varying personal allowances due to tax on benefits in kind recovered via your tax code, or increases due to gift aid or pension contributions, or any other myriad things that might affect your allowance.

Hatter The Mad · 23 Nov 2011 at 21:50

Dunks said:
I still can't believe the amount of people I hear thinking that it's on the entire amount once they go over £x.

I know someone who turned down a promotion because he thought this would be case (and no, he did not tell the employer that this was the issue - instead making up something else).

Vonhelmet · 23 Nov 2011 at 21:53

jimjamuk said:
why - are people not able to find answers to questions like these by themselves - i reckon one google search and 2 minutes reading and a question like this should be childs play for someone who lets face it would be running for a job in the 30k+ salary bracket

at least if you are going to come onto a public forum have the basics knuckled down

"Why" is because I could walk all up and down your ass with the amount of stuff I know about tax. I've probably scored half a mark in more than one exam for knowing that the personal tax system works on tiered bands. So don't come acting the genius because you know one little fact about tax.

Anyway.

I've had extremely clever people ask me this exact same question. Just because you know something doesn't make someone who doesn't know it stupid.

chippie · 23 Nov 2011 at 21:59

Pudney said:
The correct answer was: it depends

Edit: which is of course my default answer to any tax question

Only for the accountanty types

About the only thing not yet mentioned is the personal allowance being reduced if earnings start to go over £100k, but that's not an issue here!