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Now a higher rate tax payer, anything I should know?

edited 30 November -1 at 12:00AM in Cutting Tax
13 replies 1.1K views
vanderboschvanderbosch Forumite
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MoneySaving Newbie
edited 30 November -1 at 12:00AM in Cutting Tax
I have just got a new job which has put me in the higher rate tax bracket for the first time.

My salary is £56k, minus 5% salary sacrifice for pension, with annual bonus of 20%.

Is there anything obvious I should know or do in order to minimise my tax? I'm guessing the only thing I could do is salary sacrifice even further by increasing pension contributions?
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Replies

  • cloud_dogcloud_dog Forumite
    5.3K posts
    Part of the Furniture 1,000 Posts Name Dropper Photogenic
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    Pretty much.

    Any other BIK to be taken into consideration (health insurance, car, etc etc)
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
  • vanderboschvanderbosch Forumite
    6 posts
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    MoneySaving Newbie
    Yes I get a health plan which is about £9 a month BIK.

    Also £6k of my salary is a car allowance.

    I don't get any other benefit or subsidy.
  • gdrforestgdrforest Forumite
    27 posts
    Third Anniversary 10 Posts
    For anything that you gift aid you will be able to claim 20% back on your self-assessment. Always look for this option on memberships, entrance fees, sponsorship
  • zagfleszagfles Forumite
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    Tenth Anniversary 10,000 Posts Name Dropper Chutzpah Haggler
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    Claim tax back on any gift aid contributions. This can include days out eg at the zoo, national trust etc.

    Do you get marriage allowance transfer or child benefit (you or partner)? You'll lose both (child ben partially) unless you get yourself down to basic rate eg through pension contributions.
  • zagfleszagfles Forumite
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    gdrforest wrote: »
    For anything that you gift aid you will be able to claim 20% back on your self-assessment. Always look for this option on memberships, entrance fees, sponsorship
    25% (it's 20% on the gross, 25% of the net).

    Gift aid rules say for one off fees where you get something, eg entrance to the zoo, they have to charge you 10% more - this is worth doing if a higher rate taxpayer as you get 25% back.
  • redpeteredpete Forumite
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    Charitable donations? Does your company offer sharesave or similar?
    loose does not rhyme with choose but lose does and is the word you meant to write.
  • MDMDMDMD Forumite
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    Don’t forget to add in any interest, dividends etc not in an ISA.

    You need to include them if you are planning to Sal Sac down to the BR threshold.
  • lisyloolisyloo Forumite
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    I don’t know what your employer is contributing to your pension or how old you are but 5% is not very much.

    Pension salary sacrifice is a good deal because you get tax and employees NI.
    If you are lucky your employer may also pass on employers NI.
    This is quite easy to check.
    Compare your deduction with what’s been contributed to your pension (minus employers contribution).
    If your contribution is increased by 13.8% then they’ll passed it on in full.
    I had one employer do half i.e. 6.9.
  • edited 16 January 2020 at 6:23PM
    vanderboschvanderbosch Forumite
    6 posts
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    edited 16 January 2020 at 6:23PM
    I am 31, and my employer contributes 4%, which I think is about average for private sector?

    I could put more in but at the same time I would prefer to overpay the mortgage. Having said that, now I'm a higher rate tax payer it may be sensible to pay more into my pension.
  • PrismPrism Forumite
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    I am 31, and my employer contributes 4%, which I think is about average for private sector?

    I could put more in but at the same time I would prefer to overpay the mortgage. Having said that, now I'm a higher rate tax payer it may be sensible to pay more into my pension.

    Thats what I did. I haven't paid any higher rate tax for around 20 years now by contributing to a pension. Even though I could pay off the mortgage now I have just renewed a 5 year fixed deal.
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