40% tax bracket due to overtime. Can it be reduced if i dont do overtime this yr?

CLAPTON

just to add
the 40% tax band only applies to the earnings over the limit

the actual limit
is
6475 + 37,400 + her pension payments say 3000 so she will only pay 40 % tax on her earning over about 46,874

and remember that her NI contributions drop from 9.4 % to only 1 % so its not as bad as all that


but it would be good to know exactly what the letter says and exactly who it is from.

jammy86

Thanks everyone, we panicked too soon. Just rang the tax office (i did say to ring them we she first received the letter). I read 37401 on the hm revenue website and never realised that was after the personal allowence bringing it upto 43000. They've said the letter was sent in error and they'll change her tax to 20%. Stupid me not realising that 37401 was after personal allowence. duh!!!!

Thanks again

CLAPTON

jammy86 wrote: »

Thanks everyone, we panicked too soon. Just rang the tax office (i did say to ring them we she first received the letter). I read 37401 on the hm revenue website and never realised that was after the personal allowence bringing it upto 43000. They've said the letter was sent in error and they'll change her tax to 20%. Stupid me not realising that 37401 was after personal allowence. duh!!!!

Thanks again

that does seem right either.

a normal tax code is something like 647L ... there is no mention of 20% or 40% because the actual tax paid depends upon the salary, pension etc and worked out on a monthly by month basis by the payroll system

the tax man only determines the tax code.