*Loan,banking and credit>>>tax bracket

How does the higher tax bracket work?

One of the Lads at work thinks the higher tax band starts after 拢30,500 I thought it was more myself, but if this is true if I carry on working like I am, I could easily hit that and more. So how does it work if I go over that do I just get taxed 40% and that鈥檚 it or is there away around it?, as I鈥檓 staff, I get no allowances for anything I don鈥檛 have a company car etc????

The first thing you should note is that you have an annual personal tax allowance of 拢5035. This means you do not pay tax on the first 拢5035 in any tax year. (april-april).

On the next 拢2151 you pay tax at a rate of 10%.

Between 拢2151 and 拢33300 (over the allowance) you pay 22% Tax.

Anything above this you pay 40% tax.

This means the higher tax band starts at 拢38,335 (拢33,300+拢5035). Any income above this will be subject to 40% income tax.

To complicate matters you pay national insurance at 11% for earnings between 拢97 and 拢645pw but this drops to 1% above 拢645pw.

If you are close to the higher tax band you may be able to bring yourself back below the band by paying more into your pension. There is no other legitimate way to avoid the 40% demand.

Also make sure your savings and investments are in tax efficient forms (such as ISAs). This will mean that you don't have to pay tax on your interest.

Note:-
This assumes you are below 65 (above 65 your personal allowance increases to 拢7280).

Income includes all income including investments (rental income, interest, share dividends etc.)

Be happy with earning a decent wage! Source(s): Annaly Retentive!

Higher rate tax band starts at 拢33,3000. Anything you earn above this amount gets taxed at 40% - no way around it!
http://www.hmrc.gov.uk/rates/it.htm...
the 40% bracket starts at 拢35,000 works the same way as those on less than 拢35,000 except you pay 40% and not 22%. no way round it
You are taxed on the first 拢35000 at 22% after your tax allowance, then at 40% on the amount above 拢35000.

i.e up to 拢5030 not taxed,
the amount up to 拢35000 taxed at 22%
(so 22% of 拢29970)
then 40% on the amount over 拢35000.

Hope this helps.
PM is exactly right. I should know - I'm a tax inspector! :-P