Skip to main content

Calculating the UK income tax : a continuation

Image courtesy of Stuart Miles at

In a previous post Calculating the UK income tax, I showed you how to calculate the UK income tax while focusing on the employment income, read the post before reading this one. Today, I will be looking at other sources of income which includes the trading income the investment income. 

When you have various sources of income lets say you have gotten income from employment, trading and investments then the employment income will be taxed first, followed by the trading income, and then the investment income afterwards. For example let's say Ahmed has gotten an employment income of £34,000, a trading income of £10,000, an investment income  of £5,000. The personal allowance of £10,600 will be deducted from £34,000. It will remain £23,400. It will be taxed at 20%, that will give you £4,680. From the previous post on taxes you must have noted that the basic rate band falls between 0 to £31,785. So £31,785 minus £23,400 you will get £8,385. Thus part of the trading income falls into the basic rate band, thus £8,385 will be taxed at 20% which will give us £1,677. Then the remaining of the trading income (£10,000 - £8,385), £1615 will be taxed at 40% as well as the £5,000  (assuming no form of taxes have been taken from it). Its going to be £1615 + £5000 = £6615. £6615 taxed at 40% will be £2,646. Overall tax to be paid will be £4,680 + £1677 + £2646 = £9003

A. Basic rate band     (£23,400 × 20%)= £4680
                                       (£8,385 × 20%) =£1677
B. Higher rate band  (£6,615 × 40%)= £2646   A + B                                                         £9,003

Check out for part 3 of this article. Keep checking my blog regularly, cheers!


Popular posts from this blog

Eid Mubarak

Happy Eid ul Fitri

Understanding the buyers behaviour

Hello readers, today I will be writing about buyers behaviour when it comes to purchasing products (goods and services). I hope your week has been good. A buyer is an individual that makes a purchase. That purchase can be influenced by his/her emotions or his/her rational mind.

For your marketing strategy to be successful you have to truly understand the buying behaviour of your customers. Some customers buy goods based on trust and loyalty which falls into the emotional reasons. Thus, you have to build trust between your customers and yourself so they can return back to you. Trust is built when you offer good quality for reasonable prices.

Some products are bought regularly while some products are purchased seasonally. If your products fall into the seasonal category, you should only purchase them to be resold during that season. At times buyers purchase products on behalf of another individual. In that situation, you have to capture the mind of both the buyer and the actual person tha…