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additional tax bill for earnings over £100k
mat1964
Posts: 207 Forumite
in Cutting tax
I am somewhat unexpectedly going to be earning over £100k this year due to a large recent volume of work (am employed on a zero hours contract).
For various reasons, I can't do any additional pension contributions to reduce it (and am not looking for any other suggestions), so I am trying to work out what my additional tax bill will be when I do my self assessment. My tax code is 1224L - so reflects nearly the full personal allowance.
If my final earnings are £110k, so I will lose £5k of the personal allowance - will the additional tax bill be £2k (loss of £5k of the personal allowance *40%). Is it as simple as that?
For various reasons, I can't do any additional pension contributions to reduce it (and am not looking for any other suggestions), so I am trying to work out what my additional tax bill will be when I do my self assessment. My tax code is 1224L - so reflects nearly the full personal allowance.
If my final earnings are £110k, so I will lose £5k of the personal allowance - will the additional tax bill be £2k (loss of £5k of the personal allowance *40%). Is it as simple as that?
0
Comments
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You are effectively taxed at 60% on the excess £10k, rather than 40%. So yes an extra £2k.1
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The 2000 is correct - you pay 40% on the personal allowance which you should not have been granted - 5000 is taxed at 40% as opposed to 0%. However, your code is 1224L, not the standard 1257L which suggests that there may be other income/benefits?1
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