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Bracket creep |
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Bracket creepThe gradual movement into higher tax brackets when incomes increase as a result of inflation.Bracket creep Similar MatchesTax bracketTax bracketThe percentage of tax obligation for a particular taxable income. Bulge bracketBulge bracketA tier of firms in an underwriting syndicate that have the highest participation level. See: Mezzanine bracket. Zero bracket amountZero bracket amountThe standard deduction portion of income which is not taxed for taxpayers choosing not to itemize deductions. Mezzanine bracketMezzanine bracketThe members of an underwriting group with involvement large enough to be in the second participation tier from the top. Tax bracketsTax bracketsThe rates of income tax payable on taxable income. For the tax year 2003-2004, the brackets are:£1-£1,960: tax rate is 10% (starting rate) - tax on band is £196£1,961-£30,500: tax rate is 22% (basic rate) - tax on band is £6,278.58Over £30,500: tax rate is 40% (higher rate)The rate is applied to each individual's taxable income which is calculated as:Taxable income = Income - Reliefs - AllowancesThe main reliefs are pension contributions and donations to charity. The main allowances are the 'personal allowance' which every individual has (£4,615 for people under 65 in 2003-2004) and the Married Couples Allowance for couples where one spouse is 65 or over. |
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