Higher rate tax and bonus

Crazy_Diamond

I currently earn £38,000 and recieve a bonus of approximately £8,000 in my march pay. This year my employer wants to delay the bonus payment (due to end of year accounting problems) and pay it in my April pay.

This will mean that I will probably receive a bonus twice in this financial year - at the end of April and then again next March 2010.

Please could someone clarity what the tax implications of this will be. Presumably I will end up paying 40% on all of my bonus next year. Is there any way of avoiding this and including my April bonus in the 2008/09 tax year?

CLAPTON

No, you are taxed in the tax year you receive the money.... your employer could of course delay next years bonus until april 2010 too.

JayZed

This will cost you £567 in additional tax (assuming that your salary and bonus remain the same next year and both bonuses are paid in the 2009-10 tax year).

You might want to point this out to your employer and ask them to equalise your tax situation (i.e. increase this year's bonus by £945 so that you end up with an extra £567 net). But bonuses are generally at the employer's discretion, so they may just say "tough luck".

apcorbett

Crazy_Diamond wrote: »

I currently earn £38,000 and recieve a bonus of approximately £8,000 in my march pay. This year my employer wants to delay the bonus payment (due to end of year accounting problems) and pay it in my April pay.

This will mean that I will probably receive a bonus twice in this financial year - at the end of April and then again next March 2010.

Please could someone clarity what the tax implications of this will be. Presumably I will end up paying 40% on all of my bonus next year. Is there any way of avoiding this and including my April bonus in the 2008/09 tax year?

Is the £38,000 inclusive of the bonus, or is it additional - The answer depends on this...