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Higher rate tax
The highest rate of income tax in the UK which in the 2003-2004 tax year is 40%. The rate is applied to each individual's Taxable Income which is calculated as:Income - Reliefs - AllowancesThe higher rate is only applied to the income above £30,500, as the following table illustrates.£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)Note: for dividend income the higher rate is not 40% but 32.5%.
Similar MatchesHigher rate adjustmentHigher rate adjustment
An income tax coding allocated to people who pay tax at the higher rate.For interest received from banks or dividends from shares etc, the higher rate adjustment enables the Inland Revenue to collect the additional tax due over and above the basic rate.
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