Re: Very Basic Tax Question

Miss L. Toe wrote:


"Ed_Zep" <ed_zep@xxxxxxxxxxxx> wrote in message
news:1170243826.514285.55360@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
I earn about £36k. My tax code is 492L.

Am I a basic rate taxpayer?

Yes.

The way I understand it is that the 40% band starts at 33,300 but
that's after the allowance has been taken away.

Am I right?

Yes.

assuming there are no complications (like investment income, sales
commission, annual bonus):
http://www.hmrc.gov.uk/rates/it.htm
Then you can earn:
5225+2150+33300 = 40675 before you pay at 40%

Incorrect. You have made two mistakes (well 3 actually if you include
botching up quoting the original text by not having enough '>'s):

(1) 5225 relates to 2007/8 whereas 2150/33300 relate to 2006/7.
(2) 33300 *includes* the 2150.

Hence you can earn 5035+33300 = 38335 before paying at 40%.

Your code of 492 implies they are deducting some extra tax for something
so YOU can earn:

4920+2150+33300 = 40370 before YOU pay at 40%

I think it might be 4929+33300.

.