| Earnings before 40% tax rate [message #386903] |
So, 14 Mai 2006 15:20 |
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Hello,
Please could anyone tell me how to calculate how much I could earn before
paying 40% tax in 2005-6? I had two jobs, and the tax code for both was BR
- I think because I owed tax from the previous year. Do I just add together
the starting rate £2020 and the standard rate £29380, or will the IR take
into account the amount I owed from the previous year to reduce the
permitted earnings? Thanks for any help. K
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| Re: Earnings before 40% tax rate [message #386907 ] |
So, 14 Mai 2006 15:59 |
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"KDee" <KDee [at] nonsuch> wrote in message
news:ffo9h4glqxhq$.ds79aal6q5jb.dlg [at] 40tude.net...
> Hello,
> Please could anyone tell me how to calculate how much I could earn before
> paying 40% tax in 2005-6? I had two jobs, and the tax code for both was BR
> - I think because I owed tax from the previous year.
IME the reason is that because you had two jobs, each thought the other job
was the main one. You may well have paid too much tax, you need to check it
out.
--
Tumbleweed
email replies not necessary but to contact use;
tumbleweednews at hotmail dot com
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| Re: Earnings before 40% tax rate [message #386927 ] |
So, 14 Mai 2006 19:38 |
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On Sun, 14 May 2006 14:59:39 +0100, Tumbleweed wrote:
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> From: "Tumbleweed" <thisaccountneverread [at] yahoo.com>
> Newsgroups: uk.finance
> Subject: Re: Earnings before 40% tax rate
> Date: Sun, 14 May 2006 14:59:39 +0100
> Lines: 19
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> "KDee" <KDee [at] nonsuch> wrote in message
> news:ffo9h4glqxhq$.ds79aal6q5jb.dlg [at] 40tude.net...
>> Hello,
>> Please could anyone tell me how to calculate how much I could earn before
>> paying 40% tax in 2005-6? I had two jobs, and the tax code for both was BR
>> - I think because I owed tax from the previous year.
>
> IME the reason is that because you had two jobs, each thought the other job
> was the main one. You may well have paid too much tax, you need to check it
> out.
I think that might well be right, especially as the IR use more than one
name for one of the employers. I will ask the IR about it.
What I am trying to determine is how much I can be paid in total for 2005-6
(all sources of income) before reaching the 40% threshold. Since one of my
jobs is my own business, I have control over the pay. As I am paying some
tax underpaid in the previous year (and assuming for simplicity that this
amount is more than my tax free allowance), can the threshold for 40% be
less than £2020 + £29380 (ie starting band + standard rate band)?
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| Re: Earnings before 40% tax rate [message #386932 ] |
So, 14 Mai 2006 20:17 |
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KDee wrote:
> Hello,
> Please could anyone tell me how to calculate how much I could earn before
> paying 40% tax in 2005-6? I had two jobs, and the tax code for both was BR
> - I think because I owed tax from the previous year. Do I just add
> together the starting rate £2020 and the standard rate £29380, or will the
> IR take into account the amount I owed from the previous year to reduce
> the
> permitted earnings? Thanks for any help. K
You work out your tax liability as normal, then add the underpayment from
last year to it. Having an underpayment from last year will not in itself
push you into a higher tax rate. The effect of the coding is to collect it
by instalments over the year.
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| Re: Earnings before 40% tax rate [message #386939 ] |
So, 14 Mai 2006 21:52 |
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On Sun, 14 May 2006 19:17:16 +0100, Jonathan Bryce wrote:
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> Subject: Re: Earnings before 40% tax rate
> Newsgroups: uk.finance
> Date: Sun, 14 May 2006 19:17:16 +0100
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> KDee wrote:
>
>> Hello,
>> Please could anyone tell me how to calculate how much I could earn before
>> paying 40% tax in 2005-6? I had two jobs, and the tax code for both was BR
>> - I think because I owed tax from the previous year. Do I just add
>> together the starting rate £2020 and the standard rate £29380, or will the
>> IR take into account the amount I owed from the previous year to reduce
>> the
>> permitted earnings? Thanks for any help. K
>
> You work out your tax liability as normal, then add the underpayment from
> last year to it. Having an underpayment from last year will not in itself
> push you into a higher tax rate. The effect of the coding is to collect it
> by instalments over the year.
Jonathan, Tumbleweed, thanks for your replies, which answer my query.
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