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New Job Offer Query

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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!

Comments

  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    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
    jimmo Posts: 2,287 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    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
    ceeforcat Posts: 1,131 Forumite
    I see no reason why you should not take the new job - seems a no brainer to me.
  • InsideInsurance
    InsideInsurance Posts: 22,460 Forumite
    10,000 Posts Combo Breaker
    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).
  • 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
    Caz3121 Posts: 15,832 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    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
    jem16 Posts: 19,583 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    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.
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