To be annoyed at the new tax brackets?

[Justbrowsing2024]

Means myself and lots of people I know will need to pay 40% tax. The new thresholds being lowered means we will be worse off at a time when everything is going up. I know it's only on a proportion of salary but it's a proportion that was going towards the increase in mortgage (due to come off an amazing low rate), imminent increase in childcare fees, council tax and everything else.
I know it's affecting so many people but today I have felt really flat.

I'm not anywhere near the top of the threshold (£45500 salary) and unlikely to get a payrise.
I'm sure tomorrow will feel brighter but feel free to join my pity party

Yes I see that now, but I didn’t know that previously and the first person that replied to my post thought the same as me.

It does kick in at 50k.

Your medical insurance effectively takes your earnings to that level.

You won’t be paying more tax though, you will be paying the same in total as you would have paid just some of it would have been paid earlier if your tax code was correct

It’s very worrying!

Thanks, always thought 40% kicked in at £50k, I never realised that a reduction in my tax code would reduce this.

Which - topically to this thread - is probably exactly why the misunderstood HMRC explanation is written as it is. Personal allowance, then the next £37k odd at 20%. So if your personal allowance is reduced, you will understand that the 40% will kick in earlier than £50k.

Ahhh it doesn’t!

Contrary to what PPs have said, you have the full personal allowance of £12,500 and you only pay 40% on income over £50k. But you’re ignoring that your medical insurance is also income, the thresholds look at your total income (eg investment income, salary, rental income, benefits all added together) not just your salary.

There should be a tax on those posting click bait bollocks

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

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

and then idiot think its Labour that put up taxes

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.

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

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.

It's really not.

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!!!

@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.

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

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.

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.

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

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

How to set hare's running!!

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.

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)

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.

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.

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.