Possible pay rise over tax bracket

hoganrooby

Currently earn 47k per annum and it looks like I'll be getting a pay increase soon. So is it worth earning over £50270 , or will the tax increase  make it not worth it ? I have two children 13 and 15 plus I pay £120 a month into a private pension plus myself and my employer  contribute into nest. Thanks

sammyjammy

The fact you have children makes no difference to how much tax you pay, you only pay 40% if your pay net of work pension is above £50,271 and you only pay it for the amount over that.

Newbie_John

If you earn £50272 you will still pay 20% tax on most of your salary, and 40% on that £1, so it really makes no difference.
Not sure what kids have to do here? You still get child benefit, child tax account still applies although your kids are too old..

The only major implication is on savings, at £47k you could have got £1000 interests tax free and at £51k it goes down to £500 and all above it is taxed at 40% so ISAs come handy.

And as mentioned above, if your pension contribution is pre tax you can easily take it down below the threshold.

Dazed_and_C0nfused

sammyjammy said:

The fact you have children makes no difference to how much tax you pay, you only pay 40% if your pay net of work pension is above £50,271 and you only pay it for the amount over that.

True however I think most people would see HICBC as a form of "tax".

hoganrooby

sammyjammy said:

The fact you have children makes no difference to how much tax you pay, you only pay 40% if your pay net of work pension is above £50,271 and you only pay it for the amount over that.

Thanks for the replies, I was concerned  about losing the child tax benefit 

Dazed_and_C0nfused

hoganrooby said:

sammyjammy said:

The fact you have children makes no difference to how much tax you pay, you only pay 40% if your pay net of work pension is above £50,271 and you only pay it for the amount over that.

Thanks for the replies, I was concerned  about losing the child tax benefit 

Assuming you mean Child Benefit then the lower threshold for having to pay HICBC is now £60,200.

If your adjusted net income is less than that in the current tax year there wouldn't be anything for you to pay back.