Pay Rise/Tax Question

Discussion in 'Bulletin Board ARCHIVE' started by Isle of Wight Tyke, Apr 24, 2008.

  1. Isl

    Isle of Wight Tyke New Member

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    If your pay goes up by 2% this month and the tax rate drops from 22p in the pound to 20p in the pound in the same month. How much is your actual pay going up roughly in pecentage terms this month?
     
  2. Farnham_Red

    Farnham_Red Administrator Staff Member Admin

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    It depends what you earned to start with

    If on a low wage the abolition of the 10% tax band will make you worse off by more than the 2% you gain. If you earn more you will get a better increase ay you make some money on the tax changes and then get the 2%
     
  3. Isl

    Isle of Wight Tyke New Member

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    I understand the 10% band and wasn't referring to that. So anyone in that the main tax band is actually getting roughly 2% more in their pay packets + whatever pay rise they are offered, so if you get a 2% pay rise, in real teams your wage for April will be 4% better. We're talking roughly, obviously.

    What's inflation claimed to be at?
     
  4. Gue

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    5.5% genuine, think the government has it at 2.5% but could be wrong on that.
     
  5. Isl

    Isle of Wight Tyke New Member

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    that 5.5%? does that take into account the retail price index?
     
  6. Gue

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    I find it incredible that people are sucked in by the European inflation rate we use, which is based on items like furniture, plasma TVs etc., not exactly items we buy every year let alone every week. Excluded are food, petrol, council tax bills, etc.
     
  7. Isl

    Isle of Wight Tyke New Member

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    I don't think many people believe that inflation is 2.5%. I thought real inflation was way more then 5.5% that's why I asked.
     
  8. Farnham_Red

    Farnham_Red Administrator Staff Member Admin

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    Its not so simple unfortunately

    Dont forget you were only paying 10% on the first £2230 of taxable income, and this is now taxed at 20% so you need to earn over £11000 in the 20% tax band to break even.

    There is an online calculator that gives you your take home pay though

    http://www.thesalarycalculator.co.uk/salary.php

    so just plug your new salary into this and see what it says.

    Official government inflaction the CPI is at 2.5%

    Price inflation - the RPI is at 3.8%
     
  9. Farnham_Red

    Farnham_Red Administrator Staff Member Admin

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  10. EastStander

    EastStander Active Member

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    But you aren't paying 2% less tax because of the reduction of the 22% tax rate - it still depends on what you were earning in the first place, as the 10% tax rate was on the first X amount that you earned and then 22% after that....you didn't pay 22% on all your taxable income.
    But, I noticed that my tax code had changed this month (a higher figure so allowance increased), NI paid had reduced and tax had reduced.....I was about £20 a month better off, which isn't that much as to be so noticeable when compared to people who are worse off....heard one on the radio yesterday that said they had £50 a week to live off and were £10 a week worse off, not sure if the £50 figure was before or after being £10 worse off, but either way that is quite a chunk, they should have left the rates as they were.
    I don't see how these measures announced yesterday help either....talk of increasing minimum wage won't help those worse off by the tax changes who were earning over the minimum to start with, and also shifts the onus to companies to compensate these people.
     
  11. Isl

    Isle of Wight Tyke New Member

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    ah, I didn't realise that at all. Thanks for that Farnham, I've never understood income tax/NI calculations very much. I've just generally multiplied my gross by 0.75 and that's always roughly worked out.

    I suspect inflation is Daveys fault.
     
  12. Isl

    Isle of Wight Tyke New Member

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    It's boll*cks isn't it. Increasing minumum wage is just passing the buck to employers and whilst I applaud the minimum wage introductions, I think the Government is using it as a get out clause when it suits them. Making people apply for tax credits to cover short falls is disgusting to say the least. People should not be made to feel that they have to ask for handouts because the tax changes is crippling them.

    Gordon Brown was possibly the worst chancellor this country has ever seen and is likely to ever have.
     
  13. Kno

    Knowlesy Active Member

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    it is

    400k for Mostto
     
  14. Gue

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  15. Fre

    Fred202 New Member

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    Did you find out the answer to this mate? I couldn't do the calculation from the top of my head but I came across this site when I had to do my own tax calculations and it's good quality stuff: https://www.income-tax.co.uk/

    Hope it's useful for you too ;)
     

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