Paying tax in view of 2021 budget announcement

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sultangopi
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Is there a massive impact to those who were already earning above the 50k and paying 40% tax threshold prior to chancellor discussing that this will be frozen in terms of paying 40%
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martin7
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(Original post by sultangopi)
Is there a massive impact to those who were already earning above the 50k and paying 40% tax threshold prior to chancellor discussing that this will be frozen in terms of paying 40%
There's no impact.

Normally, you'd expect the threshold to rise slightly, and would then have less of your income in the 40% tax bracket.
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sultangopi
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(Original post by martin7)
There's no impact.

Normally, you'd expect the threshold to rise slightly, and would then have less of your income in the 40% tax bracket.
Yeah I was thinking this too. It barely makes a difference if your earning above 50k already prior to yesterday surely?
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londonmyst
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Probably not much difference.
In theory or practice.
Particularly given that the combination of covid, pandemic restrictions & brexit are likely to adversely impact upon the incomes of most taxpayers and pre-tax profits of most high street businesses.
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sultangopi
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I mean if one was to jump to a salary of around 75k would they have to pay much more tax with annoucnement yesterday?
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martin7
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(Original post by sultangopi)
I mean if one was to jump to a salary of around 75k would they have to pay much more tax with annoucnement yesterday?
The amount of tax they'd have to pay on a 75k salary won't change.
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Quady
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Less tax next year not more.
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sultangopi
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(Original post by Quady)
Less tax next year not more.
How you mean?
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sultangopi
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(Original post by martin7)
The amount of tax they'd have to pay on a 75k salary won't change.
Well in theory it may as personal allowance not going up?
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martin7
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(Original post by sultangopi)
Well in theory it may as personal allowance not going up?
If the personal allowance isn't changing, and the tax bands aren't changing, and the tax rates aren't changing, then the amount of tax due won't change either.
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sultangopi
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(Original post by martin7)
If the personal allowance isn't changing, and the tax bands aren't changing, and the tax rates aren't changing, then the amount of tax due won't change either.
But pa is changing in that personal allowance is frozen
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martin7
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(Original post by sultangopi)
But pa is changing in that personal allowance is frozen
"frozen" means it's not going to change.

If the personal allowance increases, then those people earning above that will pay less tax. But if it doesn't change, then the amount you pay doesn't change.

It's typically the case that the personal allowance and tax bands increase each year. But it doesn't always happen.
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Quady
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(Original post by sultangopi)
How you mean?
Well the tax thresholds are increasing in tax year 21/22, so higher rate ans basic rate taxpayers will pay less income tax at and nominal point next year.
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sultangopi
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(Original post by Quady)
Well the tax thresholds are increasing in tax year 21/22, so higher rate ans basic rate taxpayers will pay less income tax at and nominal point next year.
So who does this actually affect. E.g. which set of people have it bad
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Quady
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(Original post by sultangopi)
So who does this actually affect. E.g. which set of people have it bad
It affects every employee currently earning over £9,516.

So I guess those earning under £9,516 have it worst as they are the only ones who are not better off.
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sultangopi
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(Original post by Quady)
It affects every employee currently earning over £9,516.

So I guess those earning under £9,516 have it worst as they are the only ones who are not better off.
Apologies but where is this figure coming from when pa is 12.5k
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Quady
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(Original post by sultangopi)
Apologies but where is this figure coming from when pa is 12.5k
I think you're talking about the income tax personal allowance. If so you're forgetting about national insurance lower earnings threshold of £183/week in FY20/21 which rises in April.
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sultangopi
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(Original post by Quady)
I think you're talking about the income tax personal allowance. If so you're forgetting about national insurance lower earnings threshold of £183/week in FY20/21 which rises in April.
How does this NI part work
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Quady
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(Original post by sultangopi)
How does this NI part work
https://www.gov.uk/national-insurance/how-much-you-pay
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