the higher tax rate of 40% kicks in at £34,600 if i earn £37,000 per year do i pay the 40% higher rate of tax on the whole £37,000 or do i only begin to pay the 40% tax rate on the £34.600 - £37,000 only(£2,400)?
2007-09-24 09:23:37 · 4 answers · asked by patsy67 1 in Business & Finance ➔ Taxes ➔ United Kingdom
Don't forget that the £34,600 is taxable income, i.e. after your personal allowance has been deducted.
If your salary is your sole source of income then you would not pay 40% until your salary was in excess of £39,825.
The actual question you asked has already been answered; you only pay 40% on the excess.
2007-09-24 20:50:50 · answer #1 · answered by tringyokel 6 · 0⤊ 0⤋
only on the excess over the cut off. So 40% of anything you earn over 34,600 i.e. 40% of 2400.
2007-09-24 16:32:56 · answer #2 · answered by ilovetwirls 4 · 1⤊ 0⤋
It is from £34,601 that the 40% kicks in
Not all of the £37000
2007-09-24 16:36:05 · answer #3 · answered by stormydays 5 · 0⤊ 0⤋
You only pay it on the extra, being £2400. But also remember you are liable for extra NIC contributions also.
2007-09-24 16:56:57 · answer #4 · answered by Anonymous · 0⤊ 0⤋