Tax Thresholds 2011/12 - How Will The Changes Affect Me?
Posted by Ben Williams on Mon, Feb 28, 2011 @ 04:40 AM
The Government have announced changes to the way your income is taxed. At the moment (2010-11), there is a personal allowance of £6,475 that can’t be taxed.
The basic rate is for all incomes between £0 and £37,400 and is taxed at 20%.
The higher rate is for incomes between £37,401 and £150,000. Since 2010-11, there has also been an additional rate for any income over £150,000 and is charged at 50%.
The changes that will take place on 1st April will see the personal allowance raised to £7,475, bringing around 500,000 people out of income tax in 2011 altogether.
The basic rate will be for incomes between £0 and £35,000 (a lowering of £2,400) and will still be taxed at 20%.
The higher rate will be for incomes between £35,001 and £150,000 (The lower end of this has reduced by £2,400; the higher cut-off point has remained the same) and will still be taxed at 40%.
The additional rate stays the same, for all incomes over £150,000 and will be levied at 50%.
To see how this could affect you, take a look at the calculations below.
There is one for Person A earning £20,000 per annum, showing how the changes will affect him, and another example for Person B, who is on £200,000 per annum.
Learn more about PAYE 2011 here, or National Insurance (NI) Rates 2011 here.
Note: These calculations are only for Or, if you want to learn EXACTLY how to reduce your taxable income, therefore leaving you with more money in YOUR pocket, click here. Learn more about tax changes 2011 here.
