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yeh that's wrong, its 40% on everything between £50,271 to £125,140, and 45% on everything above that https://www.gov.uk/income-tax-rates https://www.gov.uk/in
by joelanman 2y ago
yeh that's wrong, its 40% on everything between £50,271 to £125,140, and 45% on everything above that
https://www.gov.uk/income-tax-rates https://www.gov.uk/income-tax-rates
- ManchesterDev 2y ago“You may have been thinking that the highest rate of income tax payable was 45%, at which point the rate of National Insurance is 2%, giving an effective tax rate of 47%. But did you know you could be subject to an effective combined rate of income tax and national insurance of 62% if you earn over £100,000? The 62% tax trap refers to the income band falling between £100,000 and £125,140 on which the employed or self-employed will effectively experience an income tax rate of 60% alongside national insurance contributions of 2%. This is because for every £2 you earn over £100,000 per annum, you lose £1 worth of your £12,570 tax-free personal allowance. Your tax rate only reduces to the additional rate of 45% after the entirety of your personal allowance for that year has been eroded, i.e. on income above £125,140.” Source: https://www.theprivateoffice.com/insights/have-you-fallen-victim-62pc-tax-trap#:~:text=The%2062%25%20tax%20trap%20refers,national%20insurance%20contributions%20of%202%25 https://www.theprivateoffice.com/insights/have-you-fallen-vi....
- joelanman 2y agohuh! I'm wrong! I found this easier to understand https://taxscouts.com/high-earner-tax-returns/60-tax-what-to-do-if-you-just-started-earning-over-100000/ https://taxscouts.com/high-earner-tax-returns/60-tax-what-to...
- thebruce87m 2y agoNote that the rates are different in Scotland too.