this 10p tax issue.....

A question about : this 10p tax issue.....

can anyone explain ( very simply) what its about.
iam 30 years old, single, no kids, with mortgage earning Ј27k
how will i be affected?

Best answers:

• You'll be slightly better off than before. They have taken away the first band of income tax which used to be 10%. They have then reduced the second tier from 22% to 20%. This means that generally if you earn under about Ј18.5k with no kids etc you'll be slighty worse off than before.
• so, instead of getting taxed 22% i will get taxed 20% on my salary?
• Yes, you will pay 20% tax instead of 22%
• In other words those on lower incomes will suffer,
  while those on higher incomes will benefit.
• surprise surprise
• Did Gordon Brown think this one through?
• But some people will lose out and they are the poorest people. I am on incapacity benefit, which is taxable and takes up most of my personal tax allowance. I also have some interest on compensation from a car accident which tops up my income. That interest all fell within the 10% tax band, so previously 20% tax was automatically deducted by the bank, but then I got half of that tax rebated as I was on the 10% tax bracket. From 6th April 2008 the 10% tax band has gone, and my income tax has gone up by 100% (from 10% to 20%). This is my only income. There will be a lot of people on low incomes in a similar position.
• Also factor in inflation, rocketing food costs, fuel bills, petrol price increases etc. and no pay increase and then do the sums.
• I read somewhere that there are 2 measures of inflation, RPI, or something like that and one other. 1 measure runs higher than the other so, depending on whatever the agenda is, you may hear either of the 2 being quoted. Eg. Energy companies, supermarkets etc need an excuse to put up their prices, they quote the higher rate of inflation to justify higher increases. Your employer negotiates your pay rise, they quote the lower rate so that they don't have to give you such a big raise.......that's my theory anyway
• Hi
  I don't understand this tax business at all so could someone let me know if I'm going to be any better off?
  I am 35 full time employed Ј14k per year, husband full time employed Ј14500 per year, two kids (10 & 15) and entitled to around Ј16 per year tax credits! oh and a mortgage (90k)
  Will I be any better off?
• Hi,
  I completely agree with sdooley, 10% tax rate is always presumed in this kind of situation, so first verify th solicitor's client account.:rolleyes: