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60% effective tax band-advice needed

sturgeon · 2022-11-12 11:05:31

My basic salary is £110k which takes me into this effective 60% tax rate for the £10k over £100k. As a result, my own pension contributions (taken at source) add up to (just about) £10k so my effective taxed salary is £100k. So I'm not really impacted by the 60% effective rate, right? If I receive say a £10k bonus, or my…

12 November 2022 at 12:05PM in Cutting tax

41 replies 1.6K views

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18 November 2022 at 10:29AM

Firefly12345 Forumite
11 Posts

Forumite

18 November 2022 at 10:29AM

I am in this potential salary yoyo zone. The problem with the above plan is that most of us also have significant employer contributions. If I don't put into the pension one year I miss out on this free money.... It makes the yoyo plan less valuable and even more difficult to calculate. Add in the variability of bonus amounts and I simply CBA. I just pay as much as I can into the pension each year and am thankful that the tax relief is still available!

With the freezing of PAs till 2028 and inflation running hot lots more people will have to go down this rabbit hole.

Ciao

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