Business & Finance

Higher rate tax

Hi, my husband has just got a new job with a much higher salary than before, and he's now going to be on higher rate tax. Could anyone tell me wether he will have to pay 40% on the whole of his wages or just the bit that goes over the threshold?
Thanks

missrandom Tue 29/04/08 19:19

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Ethel
Tue 29/04/08
19:30

Just the bit over the threshold

hev
Wed 30/04/08
10:48

First 5435 is tax free then its 20% up to 36000. Everything above 36000 is 40%

missrandom
Wed 30/04/08
13:19

Question Author

oh thank you. I was really worried and thinking we wouldnt be much better off, but thats great. Thanks x

vicars
Thurs 01/05/08
13:29

A lot of people think they will be worse off being higher rate tax payers but this isn't true. As an aside, as he is going to be a higher rate tax payer why not make sure he is paying what he can into his pension to get the most out of it? This way for every £100 going in, £40 is paid by his tax and £60 by him. Worth looking into.

missrandom
Thurs 01/05/08
15:46

Question Author

thats a good idea thanks I'll look into that. He's also able to buy shares and the company match what he buys, so we'll definately look into both of those things.
thanks

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