Conor:
Sploom:
Yes,as I said,I wouldnt do the overtime if it wasnt for the pension tax relief,So you’d deliberately keep yourself poorer than you’d need to be just so you didn’t have to pay an extra 10p per £1 in stoppages?
20p in the pound basic,40p in the pound higher rate.Isnt tgat 20p difference.But the NI rate gies diwn to 2%…
If I work a rest day at the weekend,any overtime rate is wiped out by the higher rate tax.So,no,I wouldnt bother.
stu675:
Sploom:
I didnt know about the married allowance rule.It seems you run into all sorts of problems once you earn over 50kIt’s even worse when you earn over 100k. You start losing your personal allowance, effective tax rate of 60% the poor souls.
It must be admited that some people who earn over a 100k do deserve it,or they worked hard for it.
It took me a matter of weeks to learn to drive a truck.If it takes 20 years to become a surgeon,I cant really make the argument that he should have half of that money taken away in tax to bring him closer to my level
Sploom:
I got a bit confused with the figures you mentined.What I do is divide the extra by 1.25%,then put that amount in a sipp,the tax reief is added automatically,then claim the rest back through the tax return,so if I earned 55k and lets say the higher rate kicked in at 50k.This would mean 5k/1.25=4k.Put 4k in the sipp,get the tax reief of 1k,(*1.25),then claim the other 1k back through the tax return,but if you use a sipp,best to wait till March before you put anything in it because if you found yourself out of work for any reason,once youve put the money in ,not being able to take it out again,you could end up putting too much in.This is what I did last year and havent paid any higher rate tax at all
So are you paying the extra 4K out of your net pay, or are you managing to pay into your SIPP before tax? And why do you do a tax return?
Just curious mate. I’ll be hovering around 50 this year, depending on the hrs. It might be 48, it could be 55+. So trying to be as tax efficient as possible.
Cheers
You pay into a sipp using net pay,so ,say the higher rate tax kicked in at 50k,for arguments sake,and yoy earned 55k ,you earned 5k over the basic rate.
5k÷1.25=4k.So you pay 4k into your sipp,you get basic rate tax relief automatically which is the opposite calculation 4k *1.25=5k,so now you have the full 5k in your sipp.You must then fill in a tax return ,in order to claim the othet 1k.They will then adjust your tax code in order to give you back that money.So,once you did all this,you avoided paying higher rate tax.You will be taxed when you withdraw money from the sipp but the idea is,you wont be a higher rate taxpayer by then.plus you can take out 25% tax free,thats the law at the moment at least
That’s great. Thanks for the explanation. I already put 2.5 k per year in a SIPP, so I’ll keep an eye on how much I’m earning, later in the tax year, and maybe make some adjustments.
Do you know if the amount taken in company auto enrollment contributions enables you to keep under 50k?
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Fozzer:
That’s great. Thanks for the explanation. I already put 2.5 k per year in a SIPP, so I’ll keep an eye on how much I’m earning, later in the tax year, and maybe make some adjustments.
Do you know if the amount taken in company auto enrollment contributions enables you to keep under 50k?Sent from my BV6600 using Tapatalk
It depends if its taken off the top line or bottom line.
If its taken pre tax which most workplace schemes seem to go with you’re getting tax relief at source as your slice of pension contributions is taken before tax and then you’re left with a taxable income which is the figure on your P60.
For example very roughly I earned 56k last year, but I paid 4k into my workplace scheme pre tax so my taxable income was 52k.
Ok cheers. It might be less administration, for me, if I just bang up my auto enrollment percentage.
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Yes,thats the simplest way,just increase your pension contributions at work.The only downside,you might not earn as much as planned,whereas,with the sipp,you can calculate it exactly on tgelas week of march
Ah right, that’s what I was curious about. You make the SIPP arrangements right at the end of the tax year.
Do you self assess by the end of the next January?
Your right about upping your auto enrollment. It’s ok when the extra money is rolling in, but a couple of lean months, or more, and your take home is well down. Plus payroll will get pished if you’re forever adjusting your percentage.
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discoman:
Some how that government will tax the money don’t be naive.
It’s simple, they tax pensions when you draw them.
So long as the richest…
0.1% keep on paying a lower rate of tax than us ordinary proles, I’m going to keep on judging the ■■■■ out of them thanks.
this pinot grigio is wonderful
stu675:
discoman:
Some how that government will tax the money don’t be naive.It’s simple, they tax pensions when you draw them.
The idea is that by this time you wont be in the higher rate tax,plus you can withdraw25% tax free anyway
Fozzer:
Ah right, that’s what I was curious about. You make the SIPP arrangements right at the end of the tax year.
Do you self assess by the end of the next January?
Your right about upping your auto enrollment. It’s ok when the extra money is rolling in, but a couple of lean months, or more, and your take home is well down. Plus payroll will get pished if you’re forever adjusting your percentage.Sent from my BV6600 using Tapatalk
You can do the self assessment online,its easy enough.Im waiting for my p60,then I will fill it in.It takes thrm 2 montgs to read it but that doesnt matter.Yes ,I wait till the last fortnight before tge end of the tax year,so last year I got it down to the nearest couple of pound
yourhavingalarf:
So long as the richest…0.1% keep on paying a lower rate of tax than us ordinary proles, I’m going to keep on judging the [zb] out of them thanks.
Im not talking about those guys.Im on about professional roles like surgeons,engineers,or whatever,I dont know.If I had spent my life working really hard into a senior position,I cant see why I should then have half the money taken off me.The obvious exampke,a senior surgeon,takes 25 years hard work,then he gets taxed to the hilt.
Sploom:
senior position.
God…
Is/was in a senior position, what’s his/her/it/them personal tax allowance?
Trolling again
DILLIGAF?..
stu675:
Sploom:
I didnt know about the married allowance rule.It seems you run into all sorts of problems once you earn over 50kIt’s even worse when you earn over 100k. You start losing your personal allowance, effective tax rate of 60% the poor souls.
When you earn 60k(if you don’t put in your pension) and have 2 children you have marginal tax rate of approx 60% as well. Because of the HICBC.
Goes up to approx 70% if you have 3 children.
Yes ,something wrong somewhere.The other thing,the working tax credit.You only have to work 25 hours a week,then the government makes up the shortfall which is all very well,but where does the money come from?
From the guy working 60 hours.But why should he subsidise the one who can only be bothered to work 3 days?
Sploom:
Yes ,something wrong somewhere.The other thing,the working tax credit.You only have to work 25 hours a week,then the government makes up the shortfall which is all very well,but where does the money come from?
From the guy working 60 hours.But why should he subsidise the one who can only be bothered to work 3 days?
Or looked at another way why she he subsidise the wages bill of the 3 day worker’s employer. If he paid better wages then it would worth going full time. The only reason he can attract anyone to work for him is because the taxpayer is footing part of his labour bill.