Will I pay 40% bracket on car?

MandyMorePay

Hi

I have just recieved a payrise and bonus and am unsure if i will be in the 40% car tax bracket, and if so if my car cost doubles?

I now earn:

Wage: £35,000
Bonus: £5,250
Car £5,000 (roughly annual)
Health Care £600
Pension : 5.3%
Charity Salary Sacrifice £10 pm
Share scheme £40 pm


help! i'm so confused with it all.

[Deleted User]

No - your income is below the amount after which 40% is deducted and I have not bothered to take into account the last three items which keep you further below the threshold

Dazed_and_confused

If you are Scottish resident for tax purposes then your income would be over the higher rate threshold for a full tax year but the pension would bring you back into the basic rate bracket.

Remember you only pay 40% tax on any income above your basic rate limit so you may end up being a higher rate payer but not pay very much higher rate tax, for example if your company car meant £1,000 of your income fell into the 40% band (41% in Scotland) then you would only pay 40% tax on that £1,000, not the full car benefit of £5,000.