Higher Tax Bracket

ottoboxer_2

I am receiving a pension about £17k and I'm also employed on personal contract earning about £41k. What tax should I be paying as I'm worried that the 2 wages are being treated separately where I think they should be treated as a total income?

xylophone

Have you advised HMRC?

If not, do so.

MEM62

Based on the figures you have provided and assuming that you only have standard allowance;

Salary = 41000
Pension = 17000
Total Income = £58,000
Less Personal allowance of 9440
Taxable income = £48,560
32010 will be charged at 20% = 6402
16550 will be charged at 40% = 6620

Your tax liability is £13,022 per annum.

Of course you personal situation may have other factors that impact on you liability so you need to inform HMRC of your situation to get your coding and tax right.

jem16

ottoboxer wrote: »

I am receiving a pension about £17k and I'm also employed on personal contract earning about £41k. What tax should I be paying as I'm worried that the 2 wages are being treated separately where I think they should be treated as a total income?

They would be treated separately as far as PAYE is concerned. However each should have a tax code that takes the other source of income into account.

On the figures you have given, I would expect your employment to carry your main tax code of 944L. This may be reduced if you have any taxable benefits such as private health cover or company car. Your pension would probably use the tax code of D0 where the whole income would be taxed at 40%. This would see the tax more or less correct, with possibly a little overpaid depending on exactly how much you are earning.