Looking for a tax advisor
in Cutting tax
15 replies 251 views
in Cutting tax
I am looking for someone to help me with my tax code / underpayment, what to do about child benefit, obv willing to pay for independent advice - any help?
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As a really rough example on £49k pa, after tax but including child benefit your net income would be £38,963, on £59k accounting for the loss of child benefit it would be £42,997 so you would only be £4,034 better off in net terms, but would have paid a lot more in tax and the loss of child benefit. Alternatively you could put £10k into a pension, retail the child benefit and not pay the higher rate tax, so your pension would grow by £10k a year for only a drop of £336 pcm over where you would be without pension contributions. As you already have to pay some into a pension anyway you are likely already halfway there, so maybe only £150 less per month for a much larger pension.
As you are in nursing your union will usually have someone who can advise as well, but also there are many on here who know far more about this than me so can go into detail.
As your effective marginal tax rate appears to be around 60%, the suggestion about making additional contribution scheme contributions makes a lot of sense. If you pay £8,000 net in, your pension goes up by £10,000, and your basic rate band is extended by £10,000. Your adjusted net income (what matters for child benefit) is reduced by the £10,000 gross contribution.