How much tax would I pay?

Bmac2010

Gross salary is 48k per year. Paid over 13 4 weekly periods a year.

Have made so far around 8k in bonus, currently I pay 40% tax (I think) very fortunate to be getting an incredible bonus in December of 75k, what % of this would be taxed? I know about salary sacrifice for pension etc but trying to work out how much I would be taxed on the 75k and then if I put 15k into salary sacrifice then how much % would I pay?

Thanks

[Deleted User]

Working on the basis that your basic salary is £48000 with no pension provision (you haven't said) you will earn £131000 in this tax year. As a result you will ultimately lose your personal allowance as a result of your income exceeding £100000 and you will have the pleasure of completing a tax return.

On the £75000 I calculate that you will pay £44000 at 40%, £23000 at 60% (effectively) and a further £8000 at 40%. - a total of £34600.

If you were to contribute £24800 into a personal pension, the tax on the £75000 will be £30000. However you will receive a repayment of £6200 by way of higher rate tax relief AND HMRC will 'top up' your contribution by the same amount. So your tax bill will reduce by £10800 and £6200 more than you contributed will be in your pension. I know that this was not the figure that you provided but I thought that I would maximise the reliefs.

I have ignored NI and, as I aid, all these calculations change if you currently contribute to a pension through your salary.

Bmac2010

Thanks for the info. I currently pay around £50 I think after tax into pension per 4 weeks.

So ideally if I don't want to lose a lot I would look to try and do a contribution to bring it back down to 100k?

Do I need to fill in a tax return regardless of what I do as I called HMRC and they didn't say I had to but they where not very helpful to be truthful

Thanks

[Deleted User]

Bmac2010 wrote: »

Thanks for the info. I currently pay around £50 I think after tax into pension per 4 weeks.

So ideally if I don't want to lose a lot I would look to try and do a contribution to bring it back down to 100k?

Do I need to fill in a tax return regardless of what I do as I called HMRC and they didn't say I had to but they where not very helpful to be truthful

Thanks

That was the basis of my sums. The £24800 contribution to a pension will bring you exactly down to £100k although you have ruined all that by admitting to a small contribution that you already make.

I assumed £48000 basic plus £8000 bonus accrued plus £75000 to be paid. That totals £131000. The £24800 will be made up to £31000 by HMRC which will bring you back to £100000 gross income.

If it were me (and I wish it was) i would ask for a tax return - too much of a grey area as to whether you exceed £100000 taxable income or not given the proposed pension contribution. If HMRC decide otherwise at least you will have something in writing!

https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return