Hypo-tax questions

marcusjames

Not sure if this is in the right forum.

I'm a UK citizen working abroad. My company has proposed to increase my hypo-tax calculation from the previous tax equilisation to a rate 5 points higher than my marginal rate in UK. They are calling the incremental "contribution to assignment costs". I thought hypo-tax should never be higher than the liability that would have been incurred in the home country.

In addition, the new rate is applied to the gross base before pension contributions. I therefore get no tax benefit from maxmising AVCs.

Does anyone have any advice/comments?

Thanks

Cook_County

Hypo tax is simply a contractural agreement - it can be any percentage you and your employer agree - subject to of course to minimum wage or other employment law that governs your contract.