Premises:: 3 Lennox Avenue, Wallasey, Wirrral. CH45 5AL. Email: info@hartaccounting.co.uk
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Subject to any revisions from the latest Finance Act and to your own particular circumstances and other sources of income you may have and possibly the circumstances of those connected to you, a tax threshold is the amount you can earn or receive before you are required to pay tax. The list below relates only to most commonly encountered income sources, taxes and tax rates.
Income Tax
If your income exceeds the personal allowance threshold, you will start paying tax as follows:
Basic rate on the next £37,700
Higher rate on the next £74, 870
Additional rate on any further income
Personal allowance (threshold) for individuals
Most common tax code for person under state pension age
Example…
£13,570 Wages for one year
£12,570 Personal threshold (tax exempt amount)
£1,000 Excess over the threshold
20% Applicable rate of tax (Basic rate)
£200 Income Tax due for the year (if no other income)
Class 1 National Insurance (NIC)
Employees
Threshold for employees to earn credits towards state pension (per annum)
Threshold for employees to start paying NIC (per annum)
Rate for employees (threshold from 06 April 2024)
*If earnings exceed £967 per week, employees pay a reduced 2% on any earnings exceeding this higher threshold.
Employers
Threshold above which employers start paying NIC (per annum, per employee).
Rate for employers
National Insurance for sole traders and partners
Class 4 NIC
Threshold
Main Rate - for profits from £12570 to 50270
Threshold
Upper Rate - for profits over £50270
Class 2 NIC
Rate (payable via your tax return)*
Annual threshold - small profits
Annual threshold - lower profits
*From 01 April 2024, Class 2 NIC is not required
For profits less than the small profits threshold you may wish to pay voluntarily.
For profits above the small profits threshold, Class 2 NIC is treated as paid. No payment is required
20%
40%
45%
£12,570
1257L
£50,270
£90,000
£88,000
Amount you can earn …(including the personal allowance £12570 and basic rate band £37700)
…before you start paying income tax at 40% (or 32.5% for dividends) is now ….
VAT registration threshold from 01 April 2024 is…
And VAT de-registration threshold from 01 April 2024 is…
£6,396
£12,570
8%*
£9,100
13.8%
£12,570
6%
£50,270
2%
£3.45 p.w.
£6,725
£12,570
If you are one of Hart Accounting’s clients and there is anything else you would find useful on this page, please let us know….
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