Working out what Tax Band Im in

mrbrown

Hi,

Im currently doing a financial self audit to see if I need to make any additional pension contributions so that I keep within the 20% tax bracket.

To find out what tax bracket Im in, do I add up all my gross income + my personal tax allowance + bank accounts interest - outgoings - pension contributions?

Thanks

mildred1978

Basically, yes.

But what are you categorising as "outgoings".

mrbrown

Thanks Midlred.
For outgoings Im including things like:
- percentage of broadband/phone bills (80% business use)
- petrol
- home electricity (a percentage of)
... stuff like that.

On a slight tangent: Have HMRC announced what the persanal tax allowance and ISA allowance is for 12/13 yet?

mildred1978

mrbrown wrote: »

Thanks Midlred.
For outgoings Im including things like:
- percentage of broadband/phone bills (80% business use)
- petrol
- home electricity (a percentage of)
... stuff like that.

On a slight tangent: Have HMRC announced what the persanal tax allowance and ISA allowance is for 12/13 yet?

Personal allowance will be £8105 from 6/4/12

Have you done this before? HMRC are funny about BB, phone, and electric being offset against tax. I believe BB and phone accounts should be in the business' name. Otherwise you can claim a flat £3 per week to cover everything.

chrismac1

I have a little spreadhseet which does exactly what you are asking for and will work for 80% or more of taxpayers. For some reason it's always in more demand from clients in March than at other times of the year!

I can e-mail you it if you PM me your e-mail.

For your other point, 21 March 2012 is the Budget Day and you may have noticed in the press that there is pressure on him from both sides - the Tory right v LibDebs - in the Coalition to make different changes to the personal allowance. So by 22 March we should all know for sure - barring the 2% chance of a knock-back on the Finance Bill - where the land lies for 12-13.

agrinnall

Surely as Mildred says we know what the 2012/13 personal allowance is, haven't coding notices already started to be sent out? I think you must mean that the personal allowance for 2013/4 will be announced in the next budget.

mrbrown

Mildred: I haev an accountant, although they charge everytime I phone/email them so I try not to when I can help it! Last year they said it was fine to deduct broandband etc... because it is valid business expense. Because I work from home most of the time its done a proportion basis (personal/business usage).

getmore4less

Just pre prepare your tax return,

that will tell you how much of your income will be 40% and require adjustment of the pension contributions.