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Income tax rate

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Income tax rate

  • This topic has 1 reply, 2 voices, and was last updated 4 months ago by AmandaP.
Viewing 2 posts - 1 through 2 (of 2 total)
  • Author
    Posts
  • June 2, 2025 at 11:28 pm #717606
    farhan1993
    Participant
    • Topics: 6
    • Replies: 1
    • ☆

    Hi,

    Sorry if I’ve completely misunderstood the notes but in there the tax rates are as follows:

    Basic rate (20%) – £1 – £37,700
    Higher rate (40%) – £37,701 – £125,140
    Additional rate (45%) – £125,141 and over

    However, I thought the rates were
    Basic rate (20%) – £12,571 – £50,270
    Higher rate (40%) – £50,271 – £125,140
    Additional rate (45%) – £125,141 and over

    I was just wondering if this was a mistake in the notes?

    June 4, 2025 at 8:06 am #717648
    AmandaP
    Moderator
    • Topics: 1
    • Replies: 26
    • ☆

    It’s two different ways of looking at it.

    If your starting point is taxable income (after the personal allowance) which is correct, then:

    Basic rate (20%) – £1 – £37,700
    Higher rate (40%) – £37,701 – £125,140
    Additional rate (45%) – £125,141 and over

    If you haven’t yet taken into account the personal allowance, then £50,270 – £12,570 = £37,700, which is what your second set of rates shows:

    Basic rate (20%) – £12,571 – £50,270
    Higher rate (40%) – £50,271 – £125,140
    Additional rate (45%) – £125,141 and over

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    Posts
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