Currently you pay no income tax on the first £5K or so of income; you pay 10% (starter rate) of the next £2K or so; and 22% (basic rate) of the rest, assuming you're not earning enough to reach the 40% (higher rate) threshold.
This ignores national insurance, which is an additional tax-by-another-name with it's own system of thresholds and rates.
Among the notable changes in this budget are that the 10% and 22% bands are replaced by a single 20% band (which mostly just shifts around who pays what a bit), and that the NI thresholds are brought somewhat into step with the income tax ones (which takes a little more from higher earners and slightly simplifies the tax system as a whole).
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Re: You missed 'I don't get it'
Date: 2007-03-21 11:15 pm (UTC)Currently you pay no income tax on the first £5K or so of income; you pay 10% (starter rate) of the next £2K or so; and 22% (basic rate) of the rest, assuming you're not earning enough to reach the 40% (higher rate) threshold.
This ignores national insurance, which is an additional tax-by-another-name with it's own system of thresholds and rates.
Among the notable changes in this budget are that the 10% and 22% bands are replaced by a single 20% band (which mostly just shifts around who pays what a bit), and that the NI thresholds are brought somewhat into step with the income tax ones (which takes a little more from higher earners and slightly simplifies the tax system as a whole).