Higher rate tax band - things to be aware of?

[Dirk Diggler]

There's new income tax rates inbound in Scotland for next year and those sites may not be updated with the details:

Yea, but I wouldn't expect those rates to be reflected in the 2022/23 figures which is what I'm looking to compare.

Even less money in your pocket. Got to pay for indyref 2, 3, 4... somehow.

I've got no issue paying the rates, I can see what we get for it compared to rUK.

 

[Mysterae_]

Yea, but I wouldn't expect those rates to be reflected in the 2022/23 figures which is what I'm looking to compare.

Opps, my bad!

I've got no issue paying the rates, I can see what we get for it compared to rUK.

Nope, not opening that can of worms.

 

[Tony Edwards]

There's new income tax rates inbound in Scotland for next year and those sites may not be updated with the details:

Bands	Band name	Rate
£14,733 - £25,688	Scottish Basic Rate	20%
£25,689 - £43,662	Intermediate Rate	21%
£43,663 - £125,140**	Higher Rate	42%
Above £125,140**	Top Rate	47%

Even less money in your pocket. Got to pay for indyref 2, 3, 4... somehow.

Its a shame the UK doesnt do that to pay for, well everything the Tories have done.

 

[Dirk Diggler]

Nope, not opening that can of worms

You already did, and there's a thread available for all the anti Scottish sentiment; no need to derail this one.

https://forums.overclockers.co.uk/threads/scottish-independence.18873120/

 

[dlockers]

Its a shame the UK doesnt do that to pay for, well everything the Tories have done.

Do what?

 

[Tony Edwards]

Do what?

Raise the tax rates to pay for things.

 

[dlockers]

Raise the tax rates to pay for things.

We have? Higher than Scotland

 

[Semple]

Its a shame the UK doesnt do that to pay for, well everything the Tories have done.

The problem I see though is it's shafting the people in the middle. there's less than 20k delta at the intermediate rate, whereas there's more than 80k at the higher rate. You're not suddenly significantly better off when you're earning 44k. (Yes I know you only pay the rate at earnings over the threshold).

If anything the end of the intermediate rate should be around 50-55k, and the end of the higher rate should drop down to 80-90k.

 

[Iamzod]

I've just come across this thread & it's left me a little concerned. Back in April I got a drastic increase in pay (300%) & i've noticed comments here about child tax credit having to be paid back, am I looking at getting a bill here?

 

[Dirk Diggler]

I've just come across this thread & it's left me a little concerned. Back in April I got a drastic increase in pay (300%) & i've noticed comments here about child tax credit having to be paid back, am I looking at getting a bill here?

High Income Child Benefit Charge

High Income Child Benefit Charge - check if you're affected, how and when to pay this tax charge, opt out and restart Child Benefit payments.

www.gov.uk

 

[Richie]

We have? Higher than Scotland

Which tax rates are higher?

Genuine question - I thought Scotland had raised theirs higher given the rhetoric from the other parties stating as such but I may have wrong info.

 

[Mr^B]

I've just come across this thread & it's left me a little concerned. Back in April I got a drastic increase in pay (300%) & i've noticed comments here about child tax credit having to be paid back, am I looking at getting a bill here?

If you're earning over £50k, then yes - as soon as you started earning that much, you'll have to pay back a portion of the Child Benefit from that point (You'll have to pay back 1% of your family’s Child Benefit for every extra £100 you earn over £50,000 each year.) If the amount is lower than £3k then it'll be added to your tax code at the end of the year, and you'll pay it back in tax the following year.

 

[ci_newman]

If you're earning over £50k, then yes - as soon as you started earning that much, you'll have to pay back a portion of the Child Benefit from that point (You'll have to pay back 1% of your family’s Child Benefit for every extra £100 you earn over £50,000 each year.) If the amount is lower than £3k then it'll be added to your tax code at the end of the year, and you'll pay it back in tax the following year.

Its only added onto your tax code if you file a self assessment. If you dont do a SA, you'll end up with a hefty fine and late payment charge from HMRC

 

[OldKitMan]

Which tax rates are higher?

Genuine question - I thought Scotland had raised theirs higher given the rhetoric from the other parties stating as such but I may have wrong info.

It's possible to save 6p a day in Scotland compared to the rest of the UK, that's the big 'lowest taxed part of the UK' spiel that the SNP Govenment use. 6p a day, when you look into it in more detail it's just a headline.

The crazy part is when you get to 43k to 50k you'll pay 53p effectively, 41p tax and 12p NI. Then once you get to 50k you start losing your child benefit. There's little incentive to move into the higher tax rate bracket as Scotland starts the higher rate at around 43k compared to 50k in ROUK. Pay even more next tax year once it goes to 42p.

Those ferries need paying for though.

 

[mk1_salami]

The entire tax system is a complete joke.

When was the last time the tax band thresholds were increased in line with inflation? Robbery by the biggest mafia that exists, to be spent on brainwashing you or massively mismanaged services and projects.

 

[LOAM]

I've just come across this thread & it's left me a little concerned. Back in April I got a drastic increase in pay (300%) & i've noticed comments here about child tax credit having to be paid back, am I looking at getting a bill here?

How far over 50k and what are your pension contributions doing to the figure that will end up on your P60?

 

[Dirk Diggler]

It's possible to save 6p a day in Scotland compared to the rest of the UK, that's the big 'lowest taxed part of the UK' spiel that the SNP Govenment use. 6p a day, when you look into it in more detail it's just a headline.

The crazy part is when you get to 43k to 50k you'll pay 53p effectively, 41p tax and 12p NI. Then once you get to 50k you start losing your child benefit. There's little incentive to move into the higher tax rate bracket as Scotland starts the higher rate at around 43k compared to 50k in ROUK. Pay even more next tax year once it goes to 42p.

Those ferries need paying for though.

That's not the question that was asked, unless @dLockers was referring to the £20k to £40k bracket when he said England has higher tax rates than Scotland?

Unless they respond to the question then I suppose we'll never know what they were on about.

 

[dlockers]

I'll be back to elaborate - key points were around 45% tax rate now at 125k, effective 60% at 100k-125k etc.

 

[Gooner Leroy]

Here's a question which I can't find an answer for. Does the value of your benefits in kind contribute to the overall earnings when determining which tax bracket is applicable?

Eg. If you earn 46k and your BiK (company car) was 10k - does that mean that 6k of earnings would be subjected to 40% tax rate?

It was my understanding that the BiK is taxed at the relevant rate which in the above example would be 20%? HMRC says the example above is correct.

 

[Draeger]

I'm hopeless when it comes to tax rates and earnings. My question in relation to this is in my case, what figure do they base your tax band on? I say 'my case' because I retired from the fire and rescue service in 2021 after 32 years service and I receive an annual pension of just under £20k pa.

When I left the fire service - retired at just over 50 years old and didn't want to just stop working, I picked up another full time job using the skillsets I developed during my career and in that job I earn £38k gross pa.

So.......daft question time........do the HMRC add my £20k pa pension together with my £38k pa wage resulting in £58k pa and me being lumped into the 42% tax bracket? I don't think that is the case but I'm unsure.