Avoiding 40% tax rate

outkastchris

Hello

I'm comming close to hitting the 40% income tax band after working many overtime hours which I could exceed and like every other hard working individual doesn't like GIVING money away! especially to those greedy MPs who get paid to live.

My thoughts were as I will be doing overtime from the start of the next tax year and throughout the year I forsee to be near the 40% tax band again after the £37400 limit if I asked my employer for an advance on my wages in March's pay where would the tax be paid? in this year 2008 - 2009 or would the tax be calculated as normal in April's 2009 -2010 pay and the advance be taken out of my net pay

There was an issue when I first started with the company, after my probation the increased my pay but made a mistake adding more than they said they where it took about a month for them to realise and said it would be taken out in one of the future months when it came round to it my pay slip read loan repayment .

An example
Salary
June 113.17 13000
July 237.73 increase too much 22000
Aug 178.34 realised mistake 18000 117.54 loan on pay slip
Sept 204.09 18000 117.54 loan paid back

would this be a true example of where the tax would be paid asking for a loan or not because of the mistake.

thank you in advance
and I hope this may help other people in similar circumstances.

dunstonh

Why are you so worried about creeping a little into the higher rate tax band?

If you want to reduce your liability then increase your pension contributions.

CLAPTON

I can't understand the figures you quote

but this tax year you can earn 40,835 before 40% tax (more of course if you contribute to a pension)

and next tax year you can earn 43,875 (plus any pension payments) before 40% tax

outkastchris

dunstonh wrote: »

Why are you so worried about creeping a little into the higher rate tax band?

If you want to reduce your liability then increase your pension contributions.

I don't have much confidence in pensions at all after watching my parents lose alot, in my opinion I'd be better saving £10 a month till i retire and then walking to the bookies the day I retire with the savings and pop it on a horse with a better outcome as I've still got 44 year to retire

Rolandtheroadie

outkastchris wrote: »

I don't have much confidence in pensions at all after watching my parents lose alot, in my opinion I'd be better saving £10 a month till i retire and then walking to the bookies the day I retire with the savings and pop it on a horse with a better outcome as I've still got 44 year to retire

£5280 on the first 33/1 shot still wont provide enough for you in retirement.

outkastchris

CLAPTON wrote: »

I can't understand the figures you quote

but this tax year you can earn 40,835 before 40% tax (more of course if you contribute to a pension)

and next tax year you can earn 43,875 (plus any pension payments) before 40% tax

I read this earlier while searching through the posts
They mentioned option
A tax allowance 6035 + the earnings up to the 34800 = 40835
pointing to a BBC website link i think
B your tax allowance is included in the tax bands 34800
which is the way i have always thought it was calculated
but when I recently seen the 34800 limit it threw me a bit as i thought it was around the 38000 mark a few years back

Thanks CLAPTON for clearing that up

Still as I'll be doing overtime for what I see at the moment for the full 12 months I will come into the that 40% bracket I don't want to increase my pension contribs as I've said pensions don't get my vote
as my thoughts get an advance of £5000 dependant on employers in this tax year and 'hope to?' pay it at the basic rate then in a way I'd be starting the next tax year minus £5000.

outkastchris

that 33/1 looks better than the pension forcast I've got at the moment

stoneyloon_2

You're only going to be paying 40% on the small amount over the threshhold - live with it!

markelock

does your employer contribute to your pension though?

I put in £100, my employer puts in £200, I've just started mine, but believe that we're pretty close to the bottom of the market, and in 25 years, things should have improved.

and as already mentioned, it doesn't work out as £100 going out of my salary, due to the tax relief on the contribution.

dzug1

Or GIVE the excess to charity. Although many of them are as grasping as MPs

MMG-SAVING

Hiya

Your earning so your gonna have to pay it, two things in life are certain death and taxes, If you gonna live and work in the UK, these are the things we have to live with. Good luck