Becoming A Higher-Rate Earner - What Do I Need To?

mr_fishbulb

I've always been a basic rate tax payer, but I've been doing a lot of overtime this year and my (potential) bonus might push me up into the higher rate for 2007-2008 (and possibly stay there next year).

Is there any sort of checklist of things that I need to do? I remember there is something about writing to my pension company to get the higher government contributuions. Do I need to notify my bank so they can adjust interest payments?

Not sure where to start. Cheers

Tim_L

Tax on savings is done via your tax return if you do one (which is no major hassle if you have one employer and a bit of savings). You don't need to worry about the pension contributions if you're on PAYE as these come out before tax is calculated, these again are sorted out via the tax return. Tell the IR when you're sure you're in the higher bracket.

mr_fishbulb

Thanks Tim

oramgepekoe

If you've a spouse who's not a high rate taxpayer then think about transferring anything that pays interest and dividends into their name to avoid higher rate tax on it.

If you make charity donations then check that you've signed a gift aid form for each as you can claim higher rate relief via your tax return.

sdooley

HMRC may say they don't require you to fill in a tax return if your affairs are simple. However this works in their interest as for most people just over the threshold pension, charity contributions and other exemptions can bring the total taxable income down.

I'd fill in a tax return, at least for the first year, even if you don't have to.