Personal Allowance

Django x2 · 20 Apr 2013 at 19:26

It's up to £7.k odd for me and the wife, meaning this year, the wife and I can take home £76k (£38k each) tax free this year, made up of salary and dividends....

SDK^ · 20 Apr 2013 at 19:29

mattyfez said:
I'd probably but a hose, or a speed boat!

Or some spelling lessons

mattyfez said:
Out goings are personal choice, as is where you live. That's almost twice whatI make, as a single person and I'm comfortable, if I was on 40k I would be utterly laughing!

If you don't own or rent a house, have a family and drive a car then £20k would be comfortable.

No1newts · 20 Apr 2013 at 21:17

Django x2 said:
It's up to £7.k odd for me and the wife, meaning this year, the wife and I can take home £76k (£38k each) tax free this year, made up of salary and dividends....

I'm assuming you earn above 100k for it to only be 7k?

No need to shrae exact figures of course!

SDK^ said:
Or some spelling lessons

Pawnless Endgame · 20 Apr 2013 at 21:23

Yeah it's £9.4k starting now. I've worked most years since year 2000, and interestingly, it went up much slower in those days. It was around £4k in 2000, then it was £5k in 2007. Bigger increases started in 2008, so that over the next 7 years (same time length as £4k-£5k) it has effectively doubled to £10k in 2014.

[TW]Fox · 20 Apr 2013 at 21:24

No1newts said:
I'm assuming you earn above 100k for it to only be 7k?

There are loads of reasons why you might have a lower personal allowance - BIK for example. The most common of which would be a company car, or health insurance, or other taxable benefits.

Bear · 20 Apr 2013 at 21:27

mattyfez said:
Personally I think its a small step in the right direction, higher earners have had it far to easy.

I'd say you're clueless, I pay more in taxes than you earn as does my wife, I would hardly call that getting off lightly.

No1newts · 20 Apr 2013 at 21:32

[TW]Fox;24153131 said:
There are loads of reasons why you might have a lower personal allowance - BIK for example. The most common of which would be a company car, or health insurance, or other taxable benefits.

I have a company car which now makes it more complex then? /sigh

I hate our tax code, I think it would help massively to have a larger PA, flat tax rate for everyone with (perhaps) a slight increase for the absurdly large incomes.

Doubt it will ever happen though

holymonk · 20 Apr 2013 at 21:33

So how much do you have to earn to be on the higher tax bracket.

Doesnt the personal allowance come off the net salary you earn?

IE if I earn 45k, pa is -9k so i wouldnt pay higher tax rate?

[TW]Fox · 20 Apr 2013 at 21:35

holymonk said:
So how much do you have to earn to be on the higher tax bracket.

£32k of taxable income, so a total package of £41k or more, pretty much.

(figures rounded for ease)

holymonk · 20 Apr 2013 at 21:37

[TW]Fox;24153182 said:
£32k of taxable income, so a total package of £41k or more, pretty much.

(figures rounded for ease)

That sucks, I would have to work out the difference - might not be worth going for a promotion!

[TW]Fox · 20 Apr 2013 at 21:38

holymonk said:
That sucks, I would have to work out the difference - might not be worth going for a promotion!

You only pay the 40% on earnings over the threshold...

Bear · 20 Apr 2013 at 21:40

holymonk said:
That sucks, I would have to work out the difference - might not be worth going for a promotion!

Its always worth going for promotion, you only pay 40% on anything above £41k so you will always earn more.

Edit: Too slow

holymonk · 20 Apr 2013 at 21:42

Yeah just stuck it into taxman calculator, its not that bad, because as you say only the amount over the limit is at 40%.

Still annoying though, if I increased pension contributions, is that a way around it?

Pawnless Endgame · 20 Apr 2013 at 21:42

On topic, what's the personal allowance for NI? I think it's 9% of your wages but can't remember at what threshold it kicks in.

Bear · 20 Apr 2013 at 21:45

holymonk said:
Yeah just stuck it into taxman calculator, its not that bad, because as you say only the amount over the limit is at 40%.

Still annoying though, if I increased pension contributions, is that a way around it?

Yes you could increase your pension contributions for anything above £41k and avoid higher rate tax. Occupational pensions are deducted before income tax is taken off but not before NI.

smokedog · 20 Apr 2013 at 21:52

mattyfez said:
Out goings are personal choice, as is where you live.

Where I live now is not out of choice but its the only place I can get job. What I do is quite specialist and opportunities for me are only available in London. I use to live in the North West but there were just no jobs there.

mattyfez · 20 Apr 2013 at 22:43

smokedog said:
Where I live now is not out of choice but its the only place I can get job. What I do is quite specialist and opportunities for me are only available in London. I use to live in the North West but there were just no jobs there.

Maybe you should look at diversifying your skill set?

mattyfez · 20 Apr 2013 at 22:48

SDK^ said:
Or some spelling lessons

Swift key on android isn't quite perfect yet..

PMKeates · 20 Apr 2013 at 22:49

mattyfez said:
Maybe you should look at diversifying your skill set?

You will almost always be better paid if you are working for a company in a role that is aligned with your specialism. Unfortunately, that does mean roles are fewer and farther between. It's a balance and it suits some people better than others. I work in a bizarrely specialised industry, where even after years many people still don't have a clue what's really going on.

The_Abyss · 21 Apr 2013 at 23:18

Bear said:
Yes you could increase your pension contributions for anything above £41k and avoid higher rate tax. Occupational pensions are deducted before income tax is taken off but not before NI.

That's not quite correct, as more and more businesses are choosing to make pension contributions via salary sacrifice which negates NI.