To be annoyed at the new tax brackets?

The example of health insurance as a taxable benefit isn't really about understanding tax thresholds and law but basic maths

Also look how Scottish Government explains it, it is much clearer and easier to understand. (The rates are different)

People understand earnings to be money they receive and from which tax is deducted - salary, car allowances, London weighting etc. It’s tangible - it’s cash.

Benefits which are received paid for by an employer (PMI etc) are not tangible in the same way - it’s non-cash - a notional payment.

Frankly when they make payrolling mandatory it will be far easier. But when it’s on your payslip you won’t be PAID the money and THEN deducted (as in earnings) - your benefit is given a value and the appropriate tax deducted.

Do you work at Tory HQ?

Yes, although I also think lots of people have always been credulous and believe things even if they don't make sense. Hence Brexit.

You may do but I doubt you advise many normal people who only pay PAYE and don’t so much or any tax planning. Maybe HNWIs are more your thing or companies.

It also shows that people see random crap on social media as fact. Which is just as worrying. Not the OP but almost certainly her colleagues who told her this.

I think what this shows more than anything is that some people have so little faith and trust in the government/politics that they think a very significant thing could be snuck out without anyone noticing.

Such sneering on this thread, very unfair on OP. The government are meant to provide content that is accessible and easily understood. This clearly isn’t the case.

You don't need to be an accountant to think that the tax thresholds wont just drop by £12k and no one will report on it.

And really you don't need to be an accountant to understand the standard income tax thresholds. Adding in taxable benefits, and losing the personal allowance over £100k complicate things more, but the standard thresholds are simple.

How is taxed different to earnings for income tax? And how different will it be when the P11D is abolished next year and benefits have to be payrolled?

(I lied when I said I was giving up)

Yes it is. No one thinks about their benefits as income. They have a taxable value but it’s not cash on a payslip. It’s complicated and abstract.

I wondered what had happened when I started to read this post!!

How to set hare's running!!

The threshold hasn't changed in ages, it's from £50,271 up to £125,140 for the 40% tax band

I’m assuming you use the NHS and maybe will use the education or care system OP. These things have been destroyed by years of Tory underfunding. They need building up to a decent state again and that will need to be funded properly.

Exactly - once again agree 100% @LittleBearPad

PMI should not be looked at as earnings - it’s a Benefit in Kind and taxed differently.

It’s really unhelpful to conflate it with earnings in the traditional sense.

Well it’s the way the law works and how it is actually taxed - I didn’t write the rules, so you may well think it’s cockeyed, but I get paid an awful lot to understand them and that’s how it works

@Morph22010 sorry I mean paying more tax because I was knocked into paying 40% tax earlier due to the reduced personal allowance. Example... I earn 43k and pay 20% on it all vs I earn 43k and pay 20% on 41k and 40% on 2k that if not for the reduced personal allowance would have been taxed at 20%. HMRC told me my understanding is wrong and I will not be kicked into the 40% bracket earlier.

Honestly, it went over my head and was similar to trying to understand someone who speaks three words of the same language and you're guessing the rest.

Both my husband and I got a letter like this recently except it has put us both on a K tax code and says my personal allowance is negative 7004 meaning I don't have a personal allowance I was panicking but my accountant has said its normal procedure and not to worry about it it will be resolved with the next self assessment and go back to normal I hope so because without the personal allowance no way will i have enough saved up to pay a much bigger than expected bill ..funnily enough HMRC owe me 7000 in overpaid taxes which I asked for a few months ago with zero response.....funny that when we owe them money they want it there and then isn't it!!!

It's really not.

No no no 🙈 I’m giving up now but both of your posts are technically wrong … but it comes to the same total tax bill so the nuances are probably academic.

You aren’t helping as that’s a really cockeyed way of thinking about it.

Hands up all the superior beings who are sneery accountants? Lots I reckon. The rest of us are not and expect things to be explained in simple English with examples where necessary.

The confusion that abounds about this is a case in point.

Jeremy Hunt

• froze personal allowances, forcing more and more into higher tax bands
• cut the savings tax free allowance from £2k to £500
• cut the capital gains limit from £12k to 3k

Feel sorry for us in Scotland where the 40% rate does indeed start at £45k