Income Tax

Income tax is a charge made by the government on earnings.

The first £7,475 earned is exempt from this tax – although in some cased others may be entitled to a higher personal allowance.

from £7,475 to £35,000 is taxed at 20 per cent and earnings between £35,001 to £150,000 are taxed at 40 per cent. Earnings above £150,000 are taxed at 50 per cent.

Income tax is also applied (at the highest rate you pay tax) to income from savings, shares, rents, and pensions.

But certain benefits, special pensions and income from tax exempt accounts like ISAs are not counted in this calculation or taxed.

Additionally, income tax relief is available on pension contributions and donations to charity under 'gift aid' or 'payroll giving'.

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