Quick question on tax, pensions & savings

Claw_back_money

Hi all

I have read lots of the threads and the :money:Guides, but am still a bit confused by the changes to tax allowances.

OH is on the cusp of HR tax, and will probably change tax bracket in April. He currently pays tax PAYE and his employer takes off pension contributions.

If I've interpreted all the information correctly, these pension contributions seem to have the effect of reducing his income down so he won't pay HR tax - is this correct?

Also, does that mean he is no longer a HR tax payer? The reason I ask is that we have a small amount of money in a joint bank account getting 1p - sometimes 2p in interest a month, so presumably if he became a HR payer that would be a bit of a nuisance as his half of the penny hasn't had enough tax paid on it?
Also, we have a Joint Halifax current account paying £5/mth - I'm not sure how that works?

Presumably it makes no difference whose names the ISAs are in - we are talking small amounts here!

I bet many of the '750,000' new higher rate taxpayers are going to be looking for help with things like this - hopefully there will be a guide soon.

TIA

Cbm

CLAPTON

in april the 40% band start at 42,475 after pension has been deducted

e.g. if his gross salary is 44,000 but he pays 3,000 in pension contribution the he will pay no tax at 40%

ISAs are exempt from taxation so they are irrelevant in this context

personally I would ignore trivial amounts of interest like current a/c interest