Will we be better off Income Tax 22%-20%?
06 November 2007, 08:50 AM
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Will we be better off Income Tax 22%-20%?
Are we going to be better or worse off come April time when IT drops from 22% to 20%? Im confused by the whole situation
Take Mr Average Joe earning £30,000 pa on tax code of 522L......
How will this affect him?
Who benefits, who loses out? Surely the government have thought this 1 through?
Are we really going to be any better off? Are there any financial experts on here that can calculate if Average Joe is going to be better or worse off?
2% of £30k is £600 per year or £50 per month but thats not taken into account the tax code or dropping of the 10% threshold.
Any thoughts??
Take Mr Average Joe earning £30,000 pa on tax code of 522L......
How will this affect him?
Who benefits, who loses out? Surely the government have thought this 1 through?
Are we really going to be any better off? Are there any financial experts on here that can calculate if Average Joe is going to be better or worse off?
2% of £30k is £600 per year or £50 per month but thats not taken into account the tax code or dropping of the 10% threshold.
Any thoughts??
06 November 2007, 09:35 AM
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Thanks to the lower rate disappearing, only those who earn between 31 and 35k will be marginally better off. Virtually everyone else will be the same or worse off. The trick is that everyone thinks they will be better off.
Basically, a single person earning £15,000 a year would be £23 worse off a year, while someone earning £30,000 would be £278 a year better off. However, that £278 will be eaten up by an adjustment in NI contributions, so someone on 30k will be no better or worse off than previously. Between 30k and 35k the small gain will be slightly more than the NI increase. Once you hit the 40% tax bracket, nothing much has changed other than the NI increase, so most 40% tax payers will also be worse off
Basically, a single person earning £15,000 a year would be £23 worse off a year, while someone earning £30,000 would be £278 a year better off. However, that £278 will be eaten up by an adjustment in NI contributions, so someone on 30k will be no better or worse off than previously. Between 30k and 35k the small gain will be slightly more than the NI increase. Once you hit the 40% tax bracket, nothing much has changed other than the NI increase, so most 40% tax payers will also be worse off
06 November 2007, 09:36 AM
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The dropping of the 10% threshold means that:
(i) the worse of are even more worse off
(ii)The average earner (or lsightly above national average) will notice a very very slight increase in take home pay. (I thini it works out at £30 a year for me)
But considering the average earner is paying £350 a year more income tax than in 2003 (due to the removal of the NI cap and in percent increase), it's going to make bugger all difference.
Free UK PAYE Tax calculator 2007. Updated for 2007 budget announcements
Go here to compare what you pay now to what you will pay next year.
(i) the worse of are even more worse off
(ii)The average earner (or lsightly above national average) will notice a very very slight increase in take home pay. (I thini it works out at £30 a year for me)
But considering the average earner is paying £350 a year more income tax than in 2003 (due to the removal of the NI cap and in percent increase), it's going to make bugger all difference.
Free UK PAYE Tax calculator 2007. Updated for 2007 budget announcements
Go here to compare what you pay now to what you will pay next year.
06 November 2007, 09:48 AM
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Pete....
''The announcements about the abolition of the basic 10% rate, the reduction of the 22% rate to 20% are not relevant for the coming tax year (April 2007 - April 2008). These announcements only apply to the 2008 tax year''
The table you posted above, isn't relevant to what is planned for TY of 04/2008-04/2009
What are the rules for NI at the moment and what are they planned for Post April 2008?
''The announcements about the abolition of the basic 10% rate, the reduction of the 22% rate to 20% are not relevant for the coming tax year (April 2007 - April 2008). These announcements only apply to the 2008 tax year''
The table you posted above, isn't relevant to what is planned for TY of 04/2008-04/2009
What are the rules for NI at the moment and what are they planned for Post April 2008?
Last edited by Mitchy260; 06 November 2007 at 09:54 AM.
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