- Original Poster
- #1
Hey guys,
I just did an online tax calculation and my estimated tax bill was lower than I thought it would be. The reason is I thought the way the tax bands worked is that the first 8k (aprox) was tax free then 9-36k (aprox) was 20% and then 36k upwards was 40% (the highest band isn't relevant to me).
But the tax calculator did it differently to how I thought. They first removed the tax free allowance from my total income and then took 20% off the remaining up to 36k. The result was that none of my income fell into the 40% range as I made about 43k for the year. This meant my liability was several thousand less than I thought it would be.
Would somebody in the know be able to confirm the website did it right or was my initial understanding correct? Thanks.
I just did an online tax calculation and my estimated tax bill was lower than I thought it would be. The reason is I thought the way the tax bands worked is that the first 8k (aprox) was tax free then 9-36k (aprox) was 20% and then 36k upwards was 40% (the highest band isn't relevant to me).
But the tax calculator did it differently to how I thought. They first removed the tax free allowance from my total income and then took 20% off the remaining up to 36k. The result was that none of my income fell into the 40% range as I made about 43k for the year. This meant my liability was several thousand less than I thought it would be.
Would somebody in the know be able to confirm the website did it right or was my initial understanding correct? Thanks.
Today I intellectually earned several thousand dollars... It's funny cause I'm not nearly as happy as I would be if somebody has just dropped off a briefcase with £2000+ in cash at my door and yet this information is essentially the same 