So with every new tax year comes changes in the UK personal income tax rates. Since the change in Government there have been quite a few changes in not only personal allowances but also income tax.
However, with a rise in the amount that can be earned tax free (the personal allowance) the income tax rates have remained slightly more static than usual so that more money is being collected from the higher income tax brackets.
The rates of UK income tax for 2012/13 are as follows:
Basic Rate Tax is charged at 20% and is applied to the first £34,370 of earnings over the personal allowance (£8,105). This is a decrease from last year when the 20% rate of tax covered earnings of £35,000.
The next tranche of earnings is charged at a higher rate of 40% for earnings from £34,371 to £150,000.
The highest rate of UK tax is currently 50% and this is charged on earnings over £150,000.
The calculations start to get confusing when earnings are over the £100,000 level as at this point the personal allowance starts to decline for every pound of income over that amount. So once you get to an income of £116,210 then you will have no personal allowance and tax is payable on all of your earnings.