Tax drop

borichnuke

borichnuke

borichnuke

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Joined
3 Jul 2007
Posts
107
From April 08 tax drops from 22% to 20% so does this mean ill see more in my pay cheque or will the government get it back some other way

Borich

Edit: you all bind? :)
 
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It's going down to 20% :) But remember that the 10% rate of income tax is also being abolished. The general consensus at the time this was announced in the budget was that for most people it was a neutral change.
 
Income tax changes from 22% to 20%, but abolition of the 10% rate, I dont think you`ll see any more money in your pay cheque.

/too slow!
 
From the figures given out at the time, low earners will be worse off, low to middle slightlty better off and middle/high earners worse off
 
IIRC its around the £18k mark there's no change, so if you earn less than that you pay a bit more tax. Over £18k a year you'll pay slightly less tax.
 
If you earn less than 17k (I think) you'll pay more tax. If you earn more, you'll pay less.

The difference is tiny though. Like, a couple of hundred quid a year at absolute most.

Edit: As someone has said, the tipping point is indeed at about 18k. If you earn about 8k you're hit hardest as you'll pay an extra 200 or so per year. This amount drops till you get to 18k at which point you start paying less tax under the new regime, saving up to 420-ish once you exceed 40k-ish.

Hooray for Excel...
 
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Rotty said:
From the figures given out at the time, low earners will be worse off, low to middle slightlty better off and middle/high earners worse off
Click to expand...

Until you factor in all the indirect taxes that our Gordon has increased over the years, then we`re all worse off in tax terms.
 
Just done the calculation using 07/08 and 08/09 rates and if you earn £16,905 your tax won't change.
If you earn less than that you pay more tax.
If you earn more than that you pay less tax.
 
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What is the total average amount of our income that goes out on tax? I remember it being mentioned somewhere that a figure of 79p of every pound we earn goes out in tax but that was ages ago and I cannot remember the source. Can anyone enlighten me?
 
Also, a point to note is that they're moving the boundary for 11% NI from about £31K at the moment to match the point at which 40% tax applies.
So, if you earn between ~£31K-£40K you will likely be paying less income tax, but more NI.
 
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