Introduction to Income Tax and NICs Pay As You Earn and income tax
Turn to Table B, pages 6 and 7 to calculate tax at the current basic rate of 20% (or the corresponding pages for S and C prefix tax codes).
This table is used as follows:
• If the employee’s exact earnings figure is not shown, then it is necessary to split the pay into two (or more) values that are shown, then add the tax figures together to find the total tax due to date • Always refer to the taxable pay in whole pounds, ignoring any pence and never rounding up. For example, a result of £76.59 rounds down to £76.
Tables C and D
If the employee’s taxable pay exceeds the amount shown in Column 1 on page 4 (for England and Northern Ireland), then Tables C and D apply. You must use these in conjunction with each other and in alphabetical order (that is, starting with Table C).
Note that only whole pounds are used. The total taxable pay to date is therefore rounded down to the nearest whole pound.
Turn to page 8 if the employee is paid monthly or to page 9 if the employee is paid weekly (or the corresponding page for S and C prefix tax codes).
Table C actually comprises Table C1 and Table C2. Table C1 has columns 1, 2 and 3 and Table C2 has columns 4 and 5. (Note that columns 2 and 4 are identical).
Tables C1 and C2 comprise of the following:
• In Column 1, the total weekly/monthly values of taxable pay up to the basic rate limit (the point at which the higher rate of income tax applies) • In Column 2, the total weekly/monthly values of taxable pay up to the higher rate limit (the point at which the additional rate of income tax applies)
• In Column 3, the tax due to date on the pay in Column 1
• In Column 4, the total weekly/monthly values of taxable pay up to the higher rate limit (the point at which the additional rate of income tax applies)
• In Column 5, the tax due to date on the pay in Column 4.
Table D is found on pages 10 and 11. The table on page 10 is used for calculating tax at the higher rate (40%) and the table on page 11 is for calculating tax at the additional rate (45%). (Or refer to the corresponding pages for Scottish tables and Welsh tables.)
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