Income tax bands - when does personal allowance loss kick in?

khbc1990

Hello everyone. I am starting a new job soon (after 6 April). With my current job, I am a higher rate tax payer but below the £100k threshold to start losing my personal allowance. In my new job, my salary will be over the £100k threshold, so I will start to lose my personal allowance. 

Does anyone know at which point my personal allowance will start to be reduced i.e. (A) is it as soon as I start the new job as they will tell HMRC what my salary is, even though I haven't yet earned over the £100k threshold in this financial year; or (B) is it at some point later this financial year once my actual income exceeds the £100k threshold; (or (C) another point)?

Dazed_and_C0nfused

A.  That doesn't happen, they only report taxable pay as it's paid, they don't tell HMRC you are earning say £120k up front.

B.  That can happen if your tax code gets reviewed during the year and you have earned over £100k at that point.

C.  This is most likely.  When HMRC review the 2022:23 tax year to see if you have overpaid or underpaid tax and see your taxable pay exceeds £100k you will be asked to complete a Self Assessment return for that year and that will establish any tax owed.

Don't forget your Personal Allowance isn't actually based on your salary or taxable pay, it's adjusted net income that counts.  Which is where additional pension contributions can be very tax efficient.

Pennywise

(C) - if you don't tell HMRC, you'll get the full personal allowance all year and then get a bill afterwards to repay the tax due from removing the personal allowance.  It's not something that automatically happens without you telling HMRC.  

Jeremy535897

You will need to register for self assessment if your taxable income is £100,000 or more.