Tax free allowance for 2012 27/01/2012
From 6 April 2012 the tax free annual personal allowance rises from £7,475 to £8,105 – a further step in the Coalition Government’s aim of reaching a tax start at £10,000 per annum by the end of the current parliament.
However, employee National Insurance will start at the much lower level of £7,592.
And to make things even more complicated the pay rate at which employers have to make their national insurance contribution starts at £7,488!
In summary the bands and tables are:
| Limits |
Annual
|
Monthly |
Weekly |
Tax / NIC Rate |
| Personal Allowance |
£8,105 |
£675 |
£155 |
20% |
| Employee National Insurance |
£7,592 |
£633 |
£146 |
12% |
| Employer National Insurance |
£7,488 |
£624 |
£144 |
13.8% |
Higher rate tax of 40% will now start at taxable income of £34,370.
Personal allowances are withdrawn when taxable income exceeds £100,000 and 50% tax will apply to taxable income in excess of £150,000.