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?
Ask the Tutor ACCA TX-UK
Income tax rate
1y ago#1It'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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