What is The Lowest UK Tax Bracket?
Getting your first job is something that would fill you with no small amount of pride and joy once all has been said and is now out of the way. The reason behind this is that you would now finally get the chance to earn a living for yourself, something that can often be difficult for people during the initial stages of adulthood if you think about it. The thing about starting to earn money is that it is fairly likely that you would have to start paying taxes, and learning about what tax bracket you belong to can make this process a bit easier to manage than might have been the case otherwise.
The lowest tax thresholds in the UK are for people that earn over 12,700 pounds a year. That’s not a lot of money, but if you were making minimum wage and were working full time this is approximately how much money you would be earning on an annual basis. That said, the thing that a lot of people don’t know about is that you won’t be taxed on the first 12,700 pounds that you earn each year.
Much on the contrary, you would pretty much only be taxed for whatever you earn over that minimum amount. The first 12,700 is called your personal allowance, and you have the right to earn it tax free. Hence, you should subtract 12,700 from your total annual income and then apply a 20% tax on the amount exceeding 12,700. This knowledge can help you save quite a bit of money on taxes which you can put towards other extremely important things such as saving up for a home or car.