/biz/ - Business & Finance

Hello!

I'm relatively new to the working world as I am a graduate, so call me a real world newb that wants to understand how it all works...

At the moment I earn £20k a year, with a view to increasing my salary to about £30k in the next couple years.

I have had a look at the tax brackets for the UK and I have learnt that if I earn £31866 between now and 2015 I will get taxed 20%.

However if I were to receive a pay rise of just £1, I would have to start paying 40% tax.

That means someone who earns £30k would get a personal allowance matching someone who got paid £40k...


So to all the UK finance aficionados on here please could you answer the following questions...

Is this really the case or am I missing something here?

If it really is that simple, how do people earning £32k for example, not kill themselves knowing getting paid less means earning more money?

What steps can one take to avoid this 40% tax trap?

Thanks!