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Now a higher rate tax payer, anything I should know?
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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?
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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Any other BIK to be taken into consideration (health insurance, car, etc etc)
Sometimes.... I am like a dog with a bone
Also £6k of my salary is a car allowance.
I don't get any other benefit or subsidy.
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.
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.
You need to include them if you are planning to Sal Sac down to the BR threshold.
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.
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.