Accountants Assemble - Christmas Bonus, sal sac in Jan/Feb/March.

[Ahleckz]

I know there's a few knowledge people on here, and not sure where else to ask...I can't decide if this is worth me worrying about or not...

I'm currently a 21% tax payer, however, with a bonus I'll be taken to 42% for this month. FWIW, pretty much all of the bonus will be taxed at 42% as I'm JUST under the threshold. January, I'll be back to a 21% tax payer. A fair whack of this bonus will be gobbled up in extra tax, so I'm wondering if I can salary sacrifice some of my salary into my pension in Jan, Feb and March so my total yearly earnings are below the 42% threshold. Will that then give me a tax rebate from the bonus, or will I pay less PAYE for those months to account for it?

The obvious answer is to salary sacrifice this bonus into my pension, but I've missed the boat for that.

In Scotland, which explains the funny tax rates but assume the point stands if I was 20%/40%. I floated the idea of sal sacing my bonus into my pension to work, and they said this is possible in theory but timings wouldn't work. I also suspect I'll get a more coherent answer here than from my HR/Payroll!

Have I missed anything?

 

[Ahleckz]

Just so I understand, as this is new to me… if I salary sacrifice under 42% my tax code will just be adjusted and I’ll pay less tax until the ‘overpayment’ of tax is paid?

I’ve googled for a calculator but can’t find one, would have thought this would be a relatively normal thing.

I’m not even sure how much tax I’ll save doing this!