Wednesday, April 06, 2011

Making sense of paying tax

It's the first day of 2011/12 tax year, meaning an all change in the tax system:
rates are rocketing, allowances ascending and thresholds thinning ...

* Find what you'll take home. We've updated the IncomeTaxChecker tool with the
new data - put in your salary and it'll instantly reveal how much will be lining
your bank account (or overdraft), and easily compare this year to what you'd
have earned last year to last.

* Personal allowances up. The amount you can earn before paying tax is up a
grand to £7,475 for under 65s meaning lower earners take home more. Those aged
65+ get £9,940 and 75+ £10,090 tax-free unless they earn over £24,000 when
gradually that bigger allowance is clawed back.

* National Insurance (NI). The amount you must earn before paying NI has
increased too, another boon for lower earners. Yet above that NI's increased
from 11% to 12% of your salary and from 1% to 2% above £42,485 - which has the
same effect on your paypacket as putting income tax up.
New Guide:

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