What is the procedure for calculation of Minimum Alternate Tax?

Income tax calculation and threshold?

• I'll appreciate if someone can help in solving my question. I have two jobs (main & second job) and i pay a lot of tax after each tax year but still owe tax. I also do self assessment online yearly to know how much tax to pay. I pay normal tax in my main job considering my personal allowance and i pay BR in my second job which is a norm. However, i heard the threshold for 2009/10 tax year is £37000 which means if all of my income is above the amount in question, i'll be taxed 40%. I fear my income will almost reach £39000 this tax year the fact i do some overtime as well. Now supposing my income reached £39000 how will this be calculated? My personal allowance is £6475. Will this amount be subtracted from £39000 before the remaining amount is taxed @ 40% or will the whole amount of £39000 be taxed @ 40%? pls help!

• Answer:

  You don't need to be registered for self-assessment and do a Tax Return for this unless you are a company director. If you send in forms P60 at end of tax year, tax office can send you a tax computation. You can earn £43,875 before you have to pay higher rate tax. After personal tax-free allowance of £6,475, you then pay 20% tax on £37,400. 40% is payable only on any excess. You won't pay higher rate on £39,000, and your current code numbers should determine you pay the correct amount of tax. Where multiple employments can take you into higher rate, HMRC has provisions to correct your code numbers, either by restriction of allowances, or coding second employment at D0 (40% deduction), with a benefit to counteract what is due at 20% in other tax code. There is no change in the tax rates and bands for the new tax year on your income level, so code numbers will remain the same.