Quote:
Originally Posted by martyh
£31,786 or even £40,000 PA is not a vast amount of money and when housing/transport/family costs are taken into consideration then then giving 40% of earnings from a wage of £40,000 can leave those people worse off than quite a few disabled people because they don't get any state help at all
|
You don't pay the 40% rate on the £40'000 you pay it on anything over the 40% tax threshold. Anything you earn below the 40% threshold is taxed at the normal rate.
Very simple example,
You earn £20'000 the 40% tax rate is on earnings over £15'000 so you pay the lower rate on the first £15'000 then the final £5000 is taxed at 40%.