40% Tax Bracket To Kick In At 42K, Lower Than Last Year

[Realistbear]

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/8177634/700000-more-to-pay-higher-rate-tax.html

700,000 more to pay higher-rate tax

More than 700,000 people will pay a higher rate of income tax after the Treasury confirmed it was lowering the threshold at which the 40 per cent rate is levied.

This tax year all earnings above £43,875 are taxed at 40 per cent. But from next April this threshold will be lowered to £42,475, the Treasury has now confirmed.

Mr Warburton said: "I'm all in favour of raising the lower threshold. But the Koalishon was desperate not to be seen benefiting the middle classes. The threshold at £42,475 is only 1.6 times average earnings, which many people will consider a relatively low income to pay such a high rate of tax."

Not only will there be more people paying the 40p rate of tax, but they will also be hit by raising of the National Insurance rate. Previously employees earning the 40p tax rate paid 11 per cent National Insurance. This will increase to 12 per cent.

At least CGT is being kept super low to protect the property speculators investors.

[nohpc]

not really a significant amount of money to those of us earning more than 42k.

If I knew my taxes were being spent wisely I'd be very happy to pay a lot more like in scandinavia.

[Realistbear]

not really a significant amount of money to those of us earning more than 42k.

If I knew my taxes were being spent wisely I'd be very happy to pay a lot more like in scandinavia.

The Skandys have a decent health service and they look after their olduns. We are a very primitive society compared with the Norsemen.

The FIFA fiasco has me convinced that we think a little too highly of ourselves. Seeing Willers and DC grovelling over a footy match confirms to me that we are going down. Slower than most gvien the resileince of our HPI and bnd market. But going down nonethless.

Edited December 3, 2010 by Realistbear

[South Lorne]

...at 1.6 times average income the new £42,000 threshold for higher tax is being applied to people on relatively modest income which means the recent top rate of 50% should be applied lower down the current scale to even up the trough and attract some needy additional income for balancing the annual deficit.....lets get the books balanced......

[fellow]

Is this because wages are falling?

[Meat Puppet]

Tax credits, both working and child, and a 16 hour work week are looking better all the time.

Anyone know if you can still get those even if you have loads of assets?

[South Lorne]

Is this because wages are falling?

...no ...to adjust for the £1,000 rise to the tax free threshold ...current Government does not wish to be seen to be helping the middle classes ....thus the adjustment at the other end to help even.....I don't think they wish to be voted back in after this little jaunt.....

[Self Employed Youth]

Bring in a 60 and 70% rate for the higher bands. And bank bonuses @ 80

[PricedOutNative]

I guess that's more people no longer entitled to child benefit....

Fiscal drag at it's best...

[19 year mortgage 8itch]

I guess that's more people no longer entitled to child benefit....

Fiscal drag at it's best...

That's the kicker. Cunnts

[ken_ichikawa]

The Skandys have a decent health service and they look after their olduns. We are a very primitive society compared with the Norsemen.

The FIFA fiasco has me convinced that we think a little too highly of ourselves. Seeing Willers and DC grovelling over a footy match confirms to me that we are going down. Slower than most gvien the resileince of our HPI and bnd market. But going down nonethless.

Except sweden is Harriet harman's feminist Soviet utopia. Kind of like Saudi Arabia but backwards but worse! A lot of people joke about sex and written contracts, they dont joke about it so much in Sweden.

[ZeroSumGame]

Tax credits, both working and child, and a 16 hour work week are looking better all the time.

Anyone know if you can still get those even if you have loads of assets?

Yes. It's an income based relief.

You'll get it up to a very considerable income of £50K per annum - tapered of course.

I guess you've never visited HMRC.gov.uk but thereon you'll find a calculator to work out precisely where you'd stand.

IMHO - if you've got a shed load of assets, get your feet up and go for that 16 hour week.

[newbonic]

Tax credits, both working and child, and a 16 hour work week are looking better all the time.

Anyone know if you can still get those even if you have loads of assets?

Pretend you've blown your cash assets on whores, gambling and drugs, while secretly buying PMs and hiding them in the loft. Then as long as your only visible assets are your house you should be ok.

[libspero]

I believe that's on top of the tax-free allowance though.. so you really need to be earning over about £50k before you actually start paying it.

[crash2006]

http://www.telegraph...r-rate-tax.html

700,000 more to pay higher-rate tax

More than 700,000 people will pay a higher rate of income tax after the Treasury confirmed it was lowering the threshold at which the 40 per cent rate is levied.

This tax year all earnings above £43,875 are taxed at 40 per cent. But from next April this threshold will be lowered to £42,475, the Treasury has now confirmed.

Mr Warburton said: "I'm all in favour of raising the lower threshold. But the Koalishon was desperate not to be seen benefiting the middle classes. The threshold at £42,475 is only 1.6 times average earnings, which many people will consider a relatively low income to pay such a high rate of tax."

Not only will there be more people paying the 40p rate of tax, but they will also be hit by raising of the National Insurance rate. Previously employees earning the 40p tax rate paid 11 per cent National Insurance. This will increase to 12 per cent.

At least CGT is being kept super low to protect the property speculators investors.

Been going on about this they have been getting away paying into a system which they pushed into debt.

[Dorkins]

The FIFA fiasco has me convinced that we think a little too highly of ourselves. Seeing Willers and DC grovelling over a footy match confirms to me that we are going down.

Some might say that you read far too much into fleeting ephemera. To those people, I say pish.

[jaynewcastle]

I think the vast majority of people in this country wouldn't think £42000 was a relatively modest income

[Constable]

I think the vast majority of people in this country wouldn't think £42000 was a relatively modest income

Modest when you consider that the price of the average crappy house is £160k...

[twatmangle]

I believe that's on top of the tax-free allowance though.. so you really need to be earning over about £50k before you actually start paying it.

You'll be surprised how easily the higher rate tax band can creep up on you.

The current limit is £37400 before you pay 40%. Of course you have £7K allowance, but this can easily be eaten up by a car, and other company benefits.

For example, my company package is so high, that it exceeds my personal allowance, meaning that even if I earn no money at all in my job, I will still have to pay tax.

If my income were £36k, I'd be paying 20%. If my income were £37k, I'd be paying 40% and losing >£1k in child benefit as well.

Putting this in the real world, anyone with a salary of mid £30K's, plus bonus, plus car, might end up paying 40% tax.

[IP Newcomer]

There are two points about taxing higher income. Firstly is that it may encourage the wealth creators to emigrate, which clearly doesn't apply at just over £40k and secondly that it will discourage people striving to improve their working skills so as to get better jobs, which clearly does apply.

[Constable]

There are two points about taxing higher income. Firstly is that it may encourage the wealth creators to emigrate, which clearly doesn't apply at just over £40k and secondly that it will discourage people striving to improve their working skills so as to get better jobs, which clearly does apply.

1. really?!

2. 'probably do the exact opposite.

The country is bankrupt. It's either slash state spending, or raise taxes, or both. Take your pick.

[twatmangle]

There are two points about taxing higher income. Firstly is that it may encourage the wealth creators to emigrate, which clearly doesn't apply at just over £40k and secondly that it will discourage people striving to improve their working skills so as to get better jobs, which clearly does apply.

It will encourage people to pay more into pensions, which might be the real aim of this policy. A whole generation of well paid people paying massively into pensions will help the city over the years and will also allow for means testing of pensions in 20 years time.

[White Craw]

http://www.telegraph.co.uk/finance/personalfinance/consumertips/tax/8177634/700000-more-to-pay-higher-rate-tax.html

700,000 more to pay higher-rate tax

This is proof that the coalition have enabled 700000 more people to move into the wealthy/rich/better off bracket.

[Snafu]

Except sweden is Harriet harman's feminist Soviet utopia. Kind of like Saudi Arabia but backwards but worse! A lot of people joke about sex and written contracts, they dont joke about it so much in Sweden.

I can vouch for this, the endless discussions, the arguments and media and political talk is ENDLESS. It, together with the weather, darkness during winter and are the top three things I don't miss at all. Well it's nicer in the summer there actually. However, I think the uk is so immensly decked on so many levels that I do wonder if moving back there is a possibility. But my gf had a uk law specific job so non transferrable.

[Snafu]

Daubing that it is easier getting a shaag on a night out in Sweden because the women have their own place!