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Your numbers are way off. It's: Basic rate of 20% on earnings between £12,571 and £50,270. Higher Rate of 40% on earnings between £50,271 and £125,139.
by jstx1 4y ago
Your numbers are way off. It's:
Basic rate of 20% on earnings between £12,571 and £50,270.
Higher Rate of 40% on earnings between £50,271 and £125,139.
Additional Rate of 45% on earnings from £125,140. (this is from the tax year starting next week, it used to be £150k instead of £125k)
You also gradually lose your tax-free allowance if you make over £100k so there's a weird dead zone in which your marginal rate is something like 60%.
Then there's NI which is effectively tax too but isn't listed in the bands above. Someone on £150k is paying 40% tax and NI (total, not marginal). Not quite half but it's not low either.
(You could get to more than 50% deductions if you factor in student loans)
- LandR 4y agoAre for those of us in Scotland, that 40% is 41% :/
- teh_klev 4y agoYes and kicks in at just over 43k :(
- Jochim 4y agoThe problem is most people simply aren't rich enough. The effective tax rate of our current, and richest, prime minister was only 22%. I'm on the low end of the higher rate bracket and already pay more than that, before counting NI/loans.
- teh_klev 4y agoThat's for England and Wales. In Scotland it's different: Personal Allowance Up to £12,570 0% Starter rate £12,571 to £14,732 19% Basic rate £14,733 to £25,688 20% Intermediate rate £25,689 to £43,662 21% Higher rate £43,663 to £150,000 41% Top rate over £150,000 46% Source: https://www.gov.uk/scottish-income-tax https://www.gov.uk/scottish-income-tax