[Barrie Yates]

Originally Posted by entwisi

so someone on 19K takes home 19K, someone who tries a bit harder and earns 22K takes home 13.2K, thats a real incentive you have there Spugs!

in fact with your figures above 19999 you need to get a 14K rise to be any better off. so you would glass ceiling most people at 20K, no incentive to work harder = Disinterested workforce, DW = poor productivity, poor prod = business goes to wall.

I have probably had a mental blockage with this - my understanding is that if you have a Personal Tax Allowance of £20K as you suggest - even if you earn £25K you only pay tax on the £5K not on the total earnings. At least that is how my tax (UK) seems to work. Perhaps I just do not understand howe it all works and someone will enlighten me?