Self Assessment above £100k income

buythedip

Morning guys,

I just wanted to check that HMRC's Self Assessment is correct for earnings above £100k. I had no idea you lost your Personal Allowance over this level. I earned £121k last year, with no income from savings or investments etc. My (late...) payment is just over £4k.

Does this sound sensible? Thanks for any advice.

Dazed_and_confused

I earned £121k last year

My (late...) payment is just over £4k

Yes it sounds roughly correct (you will lose £10,500 of your Personal Allowance making this amount taxable at 41% (or 40% if not Scottish resident for tax purposes).

But why do you think it is late?

If you want to minimise the Self Assessment tax due for 2019:20 you should be able to update your estimated (taxable) salary on gov.uk and get a new tax code for the current tax year.

buythedip

Sorry, this is for 17-18... It's clearly my liability but haven't had any heads up from our HR department despite being a large international company. My manager mentioned it in passing just before April payroll.

Your post was really helpful, thank you for a clearer explanation that I could find online

EdSwippet

buythedip wrote: »

I earned £121k last year, ...

The effective tax and national insurance rate on income between £100k and £125k is 62%. If this is likely to occur again this tax year, consider putting the excess above £100k into a pension. That will get you tax relief at 60%, or more if your employer offers pension salary sacrifice.

Dazed_and_confused

Ah, so it is late.

You should make sure you pay the tax as soon as possible as interest will probably be charged from 31 January 2019 even if you have only been asked to complete the return recently.

And depending on your tax code for 2018:19 you might have a similar amount to pay in January 2020.