New Job Offer Query

badger38_2

I have been offered a new job with another company which includes the following package:

• £40K per year salary
• 10% to 20% (on salary) in yearly bonus
• 5% pension contribution
• BUPA contribution for family
• Company car (Honda Accord) or £4K car allowance
• Business mileage payment

My package with my current employer is:

• £33k per year salary
• Living away from home allowance (£2K per year)
• Company car (ford focus)
• Pension contributions (I pay £125 per month firm pays £125 per month)
• BUPA (for just me for which I pay £33 per month)
• Business milage payments

With the higher rate tax threshold now at £35k etc can someone please let me know if I will be better off changing jobs? or if there are ways to make the system work best for me i.e. bigger pension contributions etc...



Many thanks for the help!

CLAPTON

you start to pay 40% tax when your taxable income becomes more than 7475 +35,000 = 42,475

your taxable income is
gross salary plus car allowance plus bonus plus bupa benefit (and any other benefits) minus pension payments

jimmo

Just to stress Claptons reply the first £7475 of income is tax frre.
The next £35,000 is taxed at 20%.
The balance above those amounts is taxed at 40% until you get to the 50% rate.
You definitely don't suddenly start paying 40% on everything.

ceeforcat

I see no reason why you should not take the new job - seems a no brainer to me.

InsideInsurance

The total reward package and the cash element have both gone up (subject to your views on Focus -v- Accord) so is a no brainer form a reward perspective - but its not all about the money!

Yes you will pay more tax because of the bigger salary but getting a pay rise, even if it triggers a higher tax bracket, will never result in a smaller take home pay (obviously if your on certain benefits then the total income could be effected negatively but never your actual salary).

badger38_2

Thanks guys. It's just that I am almost 8 years with my existing firm and the job security element is a big factor. However we have recently had our first child and are looking to move from our apartment to a house so the more money that I can earn at the minute the more chances we have of moving. Additionally my wife is a supply teacher and is on maternity leave so again more income would be very useful at the minute.

Caz3121

jimmo wrote: »

Just to stress Claptons reply the first £7475 of income is tax frre.
The next £35,000 is taxed at 20%.
The balance above those amounts is taxed at 40% until you get to the 50% rate.
You definitely don't suddenly start paying 40% on everything.

With being provided a car and medical will the 747 tax code not reduce so the amount tax free will be less than £7475

the differences therefore need to take into account your current tax code and future (car value and emissions can vary it)

jem16

Caz3121 wrote: »

With being provided a car and medical will the 747 tax code not reduce so the amount tax free will be less than £7475

You still get the full £7475 tax free personal allowance. The tax code simply provides a way of coding out the car and medical benefits by reducing that tax free allowance so that PAYE can operate.

If, as Clapton has already said, the OP works out his total taxable income which includes salary plus car plus medical benefit minus pension payments then it is easy to work out the tax by using the figures that both Clapton and jimmo have provided.