More Tax

Discussion in 'Finance, Property, Law' started by Silver_Bull, Sep 11, 2008.

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  1. Just got this emailed through from Sage - I didn't know anything about it. More tax to pay :(

    In May 2008, the Chancellor announced the following changes to PAYE legislation, which came into effect from your first pay period on or after 7 September 2008. These changes will help employees who are affected by the abolition of the 10% starting rate of income tax:

    The basic Personal Allowance increased from £5435 to £6035
    The basic rate limit reduced from £36000 to £34800
     
  2. So let's get this straight - he's increased the basic rate lower limit by £600, but decreased the upper limit (i.e., the point at which we start paying 40% tax by £1200. I don't remember him saying that when they were trying to get themselves out of the hole in which they had dug themselves over the 10% rate. Talk about fiscal drag! This is not far above average earnings and will pull in thousands more middle earners that were previously exempt. Nasty, conniving cnuts - obviously the hand of tax and waste Broon in this, Darling isn't allowed to think for himself.
     
  3. If you’re a higher rate taxpayer
    The changes announced by the Chancellor are designed to benefit basic rate taxpayers only. Higher rate taxpayers will pay the same amount of tax as before. This is because while the basic Personal Allowance has been increased by £600, the threshold at which you start to pay higher rate tax has been reduced by £600 - achieved through a £1,200 reduction to the basic rate tax band.

    Illustration
    Before the September changes, higher rate tax was payable on income above £41,435. This higher rate threshold’ was the combination of the earlier basic Personal Allowance (£5,435) and the earlier basic rate band (£36,000).

    After the recent changes the basic Personal Allowance has increased by £600 to £6,035 but the basic rate tax band has reduced to £34,800. When added together these last two make the new higher rate threshold £40,835 – which is £600 lower than it was previously.


    Worked example for higher rate tax payer following the changes to the basic Personal Allowance and basic rate tax band
    Rates before 7 September
    Gross Taxable Pay £55,000
    Less Personal Allowance £5,435
    Taxable £49,565

    20% on £36,000 = £7,200
    40% on £13,565 = £5,426
    Total tax due = £12,626

    Rates from 7 September
    Gross Taxable Pay £55,000
    Less Personal Allowance £6,035
    Taxable £48,965

    20% on £34,800 = £6,960
    40% on £14,165 = £5,666
    Total tax due = £12,626
     

  4. Me neither :( Stick to cash jobs :D
     
  5. The devil is always in the detail with government!

    Those of you in the 20% bracket on PAYE should see the rebate at the end of this month.

    Litotes
     
  6. Got mine!£89,So nearly a new handbag. :)
     
  7. And there was me hoping you would take me out to lunch..... :D

    Litotes
     
  8. Wish you were my wife, £89 is 10% of a new handbag :x
     
  9. Oh no,i like a new one most months so no more than £130 :D
     
  10. Handbags? I never worked out why women can't use pockets?
     
  11. They don't have any and slim girls need the handbags to store their internal organs. :twisted:

    Litotes
     
  12. And more....

    In a little-noticed move just before the summer recess, the Treasury sneaked through an amendment to the National Insurance Bill removing the restriction on raising the upper earnings limit for employee NI contributions - a ruse that would enable the Chancellor to increase tax and national insurance on those earning more than £40,000 from 41 per cent to 51 per cent by order..

    Taken from the Telegraph today