пятница, 20 июля 2018 г.

Lesson 14. Income tax

Tim starts a job earning £200 each week. When he gets his first pay packet, he finds £18.42 has been taken off his money already. This is income fax.
This does not make Tim happy but this money is used by the government to pay for things like hospitals, schools and defence.
Most people have income tax deducted from their pay before they receive it, by their employer, who then pays the tax to the government. This method of paying income fax is called PAYE (Pay As You Earn).

Tax allowance

An amount of money a person may earn before paying income tax (at the time of writing) £4745 each year for a single person.

Taxable income

Taxable income = income – tax allowance
    (per year)
Income tax is worked out as a percentage of the taxable income.

Percentage rate of income tax

10% on first £1960 of taxable income.
22% on the next £28540 of taxable income.
40% on any other taxable income.

EXAMPLE:

It Tim earns £200 each week, that will be £10,000 in one year (assuming 50 working weeks in one year).
Tax allowance = £4745
Taxable income = income – tax allowance
                           = 10000 – 4745
                           = £5255
Tim pays 10% of 1960 on first £1960 of taxable income.
This leaves 5255 – 1960 = £3295 of taxable income.
Tim must then pay 22% of £3295
Income tax = 10% 0f 1960 = £196
                and 22% of 3295 = £724.90

Total income tax for the year = £920.90 (this is £18.42 for each week if divided by 50 weeks)

 Test lesson 14
Other lessons:

Lesson 1. Wages
Автор: на

Комментариев нет:

Отправить комментарий

Подписаться на: Комментарии к сообщению (Atom)