tax return

[riccardob]

Hi,

For someone that earns 30k a year on a payee basis how much extra can he earn before having to pay 40% tax, for example through rental income?

I am confused by the allowance concept. Someone told me you can earn up to 42500 but I read that 35k is the treshold for 40% tax.

many thanks

[mullet]

The higher rate threshold is £35,000, but that is taxable income. So add the personal allowance (tax free amount) £7,475 and the total you can earn (aged under 65) before paying higher rate tax is indeed £42,475. Remember that taxable employment income is all money etc (salary, expenses/benefits) less allowable expenses. Don't forget to take account of any investment income.