Higher Rate Tax Payer in 2009/10 - Consequences?

ukclarkkent

hiya,

i'm will be in the fortunate position of being in the higher rate of income tax bracket from next week and was wondering if there's anything I need to do, e.g. does my isa status change or how about things like gift aid? i've only been a basic rate payer until now and not put much thought into it.

thanks in advance.

floss2

You need to be aware that you can now claim 40% relief on any personal pension contributions that you make, also on any professional subscriptions that you claim tax relief on. You need to physically claim this difference back from HMRC, after the end of each tax year, so that's April 2010. Info will be on the HMRC website about how to do this.

I think you may need to advise any charity to whom you have gift aid set up that your tax bracket will change from April.

Sorry, but I don't think your ISA status changes - my OH still has the same allowance as me, despite being a 40% tax payer.

Tweetinat

As you mentioned Gift Aid, it sounds like you donate money to charity? If that's the case, then you need to inform the tax office how much you donate over the year so that they can adjust your allowance. You will get tax relief as a result of your donations.

Secondly, you also will need to let the tax office know of your income from savings interest you gain (if any) over the tax year. This is because the bank will only deduct 20% tax at source and the remainder has to be collected through your tax code.

I'm sure there may be other things that you need to do, but these are the things I stumbled over when I went into the higher-rate tax banding.

Hope this helps,

Natalie