40%tax in the uk?

Question

jonny so that couldnt mean you pay 40%tax on a monthly basis i am confused as she doesnt have over 35th per month

hi thanks 4 your answer no she is only 54

Answer 1

This year 40% tax kicks in when the taxable income exceeds £34,600. This is income after deducting the personal allowance which is £5,225 (or more if she is 65 or over).

Income includes all the following

Earnings from employment or self-employment
Interest on bank deposits (count the gross interest before the 20% tax is deducted)
Dividend income (again grossed up)
Pension income
Some state benefits are taxable
Gains (but not the capital repayment) on insurance bonds

It does not include any income in an ISA

If she has any capital gains then that could push her into higher rate in any particular year also.

The tax is calculated yearly but if she is working and has a big bonus paid in April the the PAYE system assumes she will continue to get this every month and may take 40% tax on some of it. This will correct itself as future months tax is calculated on lower earnings.

Answer 2

it really is over £34,600pa taxable income (i imagine!), and it really is on the component it really is above that threshold. no longer all income is taxable. You get a own allowance, and some investments are tax free, alongside with ISA's and old PEPs. it really is distinctly complicated. To get a acceptable clarification, your pal would ought to ask the tax inspectors, yet they're very efficient. they furnish you with a tiny inner most interview room. you're really excellent - you should earn truly severe money earlier you pay 40%, and maximum persons do not get everywhere close to it. although, if operating example your pal had cashed in a chew of an coverage bond, it really is ALL counted as income in that 3 hundred and sixty 5 days, even although maximum persons would evaluate it as purely capital repaid, and it would want to create a criminal duty for higher price tax (even though it really is counted as if decrease price tax were paid on it already, like economic organisation and construction soc interest.)

Answer 3

I want to know how anyone made sense of this "question".