Did you know that in certain circumstances, UK income tax applies a marginal tax rate of 10,000%. This can potentially impact on a number of our clients who take income from their companies by a mixture of employment income, interest and dividends.
The excessive rate is triggered if your income for the current tax year passes from £45,000 to £45,001 and there is a certain proportion of interest in that total income figure. In these circumstances, the tax increases by £100 in respect of any additional Pound giving rise to a tax rate of 10,000%. We are wondering if this is the highest rate of income tax in the whole world!