It was in reply but a post snuck in. Should have quoted but you don’t need to worry about tax on bonus going over the 40% bracket as PAYE will pick it up.
Higher rate tax band - things to be aware of?
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Soldato
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He's talking about making additional pension contributions in order to get a tax break if the bonus takes him above the 40% threshold, and depending on how the pension contributions are deducted there is no guarantee that PAYE will pick up the tax rebate.
When hubby is trying to become next PM, there is no excuse.
Man of Honour
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I'm hoping the other side or another side will win!
I guess if you're.married to a politician you have to accept you can't do legal loopholes.
Soldato
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Regarding the pension thing, you only have to tell HMRC over the phone and they adjust your tax code.
Thanks for all the feedback all. Sorry I've not been able to keep on top of the replies.
I'm still a bit confused over whether or not I'll need to complete a self-assessment form; seems to be a bit of conflicting responses.
My salary will be 60k, plus a potential bonus, but it will be well under the 100k mark which brings with it some more questions/considerations. I don't know whether my pension will be paid via a net pay or relief at source scheme. I just know salary sacrifice won't be an option.
I'm still a bit confused over whether or not I'll need to complete a self-assessment form; seems to be a bit of conflicting responses.
My salary will be 60k, plus a potential bonus, but it will be well under the 100k mark which brings with it some more questions/considerations. I don't know whether my pension will be paid via a net pay or relief at source scheme. I just know salary sacrifice won't be an option.
Why do you need to keep track of bank interest?
My wife is working, but is only part time. She doesn't earn enough to pay tax, but I think she pays a smidge of NI from memory.
I've claimed for WFH for the past couple of covid years, but I believe they've changed the rules now so you can't claim if you choose to work from home, or if they have an office you can realistically use. I will be working from home, and my contract says I will (at my request), but the office is only 45 mins away so I don't think I can argue that away!
As above, 60k, but I don't think there's any fancy offerings at work other than pension. I can crank up the contributions to some extent, but I can't go too crazy as I'm getting a new mortgage in the next year or two (hopefully), so need to be able to prove my affordability
As above, I'm not sure what pension contribution method they will be using. I just know it's not salary sacrifice. My employer will be contributing a few %, but I'm not sure if it's via a net pay or relief at source scheme.
It's taxable income. I can't recall whether the bank already deduct tax when paying it to you. But they certainly don't deduct tax at 40%.
Ahh yes, that rings a bell now. I remember ignoring it in the past as don't you get some kind of allowance (which I knew I'd never exceed), but I guess you need to declare everything.
Oof, at this rate I'm going to lose most of my pay rise; half lost due to the the child benefit, the other half to the accountant who's going to have to walk me through all this
Ahh yes, that rings a bell now. I remember ignoring it in the past as don't you get some kind of allowance (which I knew I'd never exceed), but I guess you need to declare everything.
Oof, at this rate I'm going to lose most of my pay rise; half lost due to the the child benefit, the other half to the accountant who's going to have to walk me through all this
Your bank already declares it to HMRC who adjust your tax code. If you are over the allowance. As they obviously can't do this without hindsight, they will adjust a future tax code depending on what you owe or are owed.
PAYE is there to make your life easier and is applicable for the vast majority of people and probably you.
https://www.gov.uk/apply-tax-free-interest-on-savings
https://www.gov.uk/guidance/bank-and-building-society-interest-returns#background
As this is the internet people will always point out how something doesn't work.
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Man of Honour
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I do. But if it's legal where's the moral issue?
That said I accept that she undoubtedly spends the majority of her time in the UK with her husband and kids so being non domiciled is probably not quite right. Not defending her but I can't say I care a huge amount about it.
Some more ideas.
Buy 5 days extra holiday per year (lots of companies offer this) -2% salary
Opt-in to company car scheme (electric), and lose the car allowance
Gift aid receipts (including things like national trust) [and donations to your local school "PTA"]
Don't forget previous years pension allowance if you've not used it
Childcare vouchers (if you were signed up before changes)
Soldato
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This was one of the most annoying things I found when converting from contracting to perm a few years back, very few ways to be tax efficient these days.
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I've had mine set at 35%before when there was unlimited overtime on lol.
As for the C2W scheme, you don't NEED to get a bike, accessories and stuff are fine too.
Our C2W is halfords tho and they don't allow any form of electronics, had to goto an indie, bought a loada accessories and a Garmin Fenix for me cycling
Company share scheme?
healthcare plans?
Im on one that's about a tenner a month for me n the bairns (missus wasnt fussed about being on it this year)
Get all sorts of cash back should we use any health related things, me n the young un both wear glasses as we get 105 cashback each year for glasses/contacts.
That normally pays for my contacts for the year and he got 2 pairs of glasses for school n a pair of nice Rx sunnies last year
Aye the holiday one is a good shout but we got shafted this year, they gave everyone all of the extra BH leave in Feb, queue everyone trying to burn like /
days leave loads of eople left with leave means we had to carry a full week over, meaning we weren't allowed to buy.
Tax code? Marriage allowance?
I was told 51.5 was my barrier before moving upto the next bracket, checked with the DWP as I didn't wanna get told off haha.
They confirmed that by lumping all of the above onto my wages I was simply being tax efficient and its wouldnt be seen as tax avoidance
That'll do pig that'll do
Someone with a student loan getting a £30k pay rise from 20 to 50k will only keep £65 per day (less, after pension contributions)
Oh ++++. Didn't know this.
So all the NI increases are getting me, but the allowance increases which I thought would off set...do naff all.
I think you save about £25 of the £100 rise if you are on £99.9k. It is only from July though.
Soldato
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Nobody has mentioned one of the other ways to adjust your net income - the SEIS scheme (basically you're lending money to startups and small business, and the govt will give you tax relief on that). It's riskier than increasing your pension contributions but potentially interesting, thinking about it myself
Going back to the child benefit thing, you can sign up for it which gets all the things done to give NI credits or whatever else you get by registering, but you can check a box to say you don't want to be given the actual child benefit payments.
No big deal but just depends if you want to just not get the cash in the first place so you have nothing to pay/sort out after, or still take the money but have to sort out any tax liability afterwards.
Small pros and cons for each option I guess!
No big deal but just depends if you want to just not get the cash in the first place so you have nothing to pay/sort out after, or still take the money but have to sort out any tax liability afterwards.
Small pros and cons for each option I guess!
Soldato
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You will likely end up on SA under £100k if your affairs are complicated, its easier for them to just switch the SA flag on than to try to get info needed from you, so
- large investment income
- large savings income
- complicated pensions deductions requested
- rental income
are the sorts of thing that will get them to switch you to SA
You can kind of defeat this if you send them ALL the information they require and request an amendment to your tax code. If its simple they will just do it for you.
If not, welcome to SA
- large investment income
- large savings income
- complicated pensions deductions requested
- rental income
are the sorts of thing that will get them to switch you to SA
You can kind of defeat this if you send them ALL the information they require and request an amendment to your tax code. If its simple they will just do it for you.
If not, welcome to SA