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[STMO123]

FFS. I've posted two links that a monkey could understand.

FFS!!! They don't answer the rather question though.

Love Martin

They do if you can manage 1+1=2

[Golfbuddy]

FFS. I've posted two links that a monkey could understand.

FFS!!! They don't answer the rather question though.

Love Martin

They do if you can manage 1+1=2

If you go back to original question, he asked if he has to pay 40% tax on all of his earnings from now until the end of the tax year. He understands that there is a higher rate of tax but didn't understand how it is deducted monthly.

What you have to remember Steve, is that at your age, you get a special allowance. Just ask at the Post Office when you collect your pension at 0800 next Thursday.  

[STMO123]

FFS. I've posted two links that a monkey could understand.

FFS!!! They don't answer the rather question though.

Love Martin

They do if you can manage 1+1=2

If you go back to original question, he asked if he has to pay 40% tax on all of his earnings from now until the end of the tax year. He understands that there is a higher rate of tax but didn't understand how it is deducted monthly.

What you have to remember Steve, is that at your age, you get a special allowance. Just ask at the Post Office when you collect your pension at 0800 next Thursday.  

0730 Monday. Now break off.

[matt-sboro]

thats right goldbuddy - i understand that at the start of the year if they knew i was going over the limit then they would start taking money from the beginning - but i have exceded that limit in overtime so now i am just about to go over it  with 5 months left of the tax year - so i'm a bit concerned that they will suddenly start taking 40% of my earnings each month now.

[tunnie]

i did not realize the bracket for 40% was so feking low!

I am dangerously close to it  

[Andy B]

i did not realize the bracket for 40% was so feking low!

I am dangerously close to it  

That's why it's so low, to catch as many workers as possible. When higher rates were first introduced they were intended for the rich, not ordinary working class (if you work ... you're working class! ) people with relatively ordinary jobs. The thresholds have purposely failed to keep up with the times.

[Kevin Wood]

Don't forget that any income you receive outside PAYE (interest on savings, share dividends, etc.) will have tax deducted at the standard rate.

It's your total taxable income that matters, not just what gets paid through PAYE, so if you are at or near the higher rate threshold through PAYE earnings you need to add up your total taxable income and work out if you are paying too little tax. If you are, it's your responsibility to tell the inland revenue, who will normally require you to complete a tax return. Any additional tax will then usually be deducted by changing your PAYE tax code for the following year.

Kevin

[Golfbuddy]

thats right goldbuddy - i understand that at the start of the year if they knew i was going over the limit then they would start taking money from the beginning - but i have exceded that limit in overtime so now i am just about to go over it  with 5 months left of the tax year - so i'm a bit concerned that they will suddenly start taking 40% of my earnings each month now.

Don't worry too much about it. As I said, your tax is calculated monthly so you have probably already been paying higher rate tax but didn't know it. Depending on the size of your company, call the wages department or better still send a written request and they will be able to give you chapter and verse. Also, depending on the size of the company, the deductions are all set out in tables or automatically calculated through a payroll programme like Sage Payroll, so it is unlikely that you will have to pay 40% on all of your wage until the end of March 2009.

Just to add to what Kevin has said above. Tax on savings still retains the lower tax rate of 10% which will count before you start to pay at 22%. More and more complicated, that's why I use Mrs GB to do all the tax returns etc.

[Kevin Wood]

Just to add to what Kevin has said above. Tax on savings still retains the lower tax rate of 10% which will count before you start to pay at 22%. More and more complicated, that's why I use Mrs GB to do all the tax returns etc.

Yep. Should have said that they're not necessarily taxed at the same rate as PAYE income.

The point I was making is that the bank / building society, etc. don't see your income from other sources so don't know you need to be taxed at the higher rate. They will not tax you enough if your income takes you into the higher rate so there will be additional tax to pay that you must declare.

Kevin