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Bringing annual salary below 50k to avoid child benefit charge
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No. You have to take the savings income into account, whatever the figure (unless it is less than £1), in calculating adjusted net income. If your saving income was £600, your adjusted net income would be £59,000 + £600 - £9,000 = £50,600, which would mean that you would only get £500 interest taxed at 0%, there would be some element of HICBC, and you would pay some higher rate tax. Ensure that you keep all your income, including interest, less gross pension contributions, below £50,100.1
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challengesahead said:Thanks for all the replies.
I managed to open a SIPP account and will be transferring funds to it. I do have savings income but less than 1k.
Total taxable income including bonus for year 22-23 - £59,000
If I am calculating right?, I need to put £7200 (20% of 9000) into my SIPP before 6th April 2023. and then claim(another 20%) when filing SA.
Is there anything else I need to take care of to make sure I stay below 50k(or in other words increase the basic rate band to £59000)?
So taxable interest of say £700 will add £700 to your ANI even if you pay 0% tax on it. Same for dividend income.
And there is no fixed extra 20%. The amount of higher rate relief will depend on how much higher rate tax you would otherwise be paying.
With taxable income of £59,000 then that will be a maximum of £8,730 and from what you've posted some of that may have been taxed at 0% not 40%.1
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