Avoid higher rate tax

chrisd80

Gone overboard with earnings and savings.

Says taxable earnings £56920.07 and id say around £800 in savings outside and ISA.

I am in NHS pension and pay 8.3 percent.

How much extra tax would I owe on this? Would it be an extra 20 percent as i am PAYE and have already been taxed on this?

I understand you can pay into a pension to avoid this but unsure how to go about it.

Can I put it into my existing NHS pension? Would it all have to be paid as a lump sum before 5 April?

Or do I have to open a private pension? Or is it too late or any other options?

[Deleted User]

chrisd80 said:

Gone overboard with earnings and savings.

Says taxable earnings £56920.07 and id say around £800 in savings outside and ISA.

I am in NHS pension and pay 8.3 percent.

How much extra tax would I owe on this? Would it be an extra 20 percent as i am PAYE and have already been taxed on this?

I understand you can pay into a pension to avoid this but unsure how to go about it.

Can I put it into my existing NHS pension? Would it all have to be paid as a lump sum before 5 April?

Or do I have to open a private pension? Or is it too late or any other options?

I would check with your employer (and it is up to them to check). What is your contracted 37.5 hours salary as, on those earnings (which are after pension contributions) you should be paying 12.5%?

https://www.bma.org.uk/pay-and-contracts/pensions/additional-pensions-advice/nhs-pension-contribution-rates

Bookworm105

chrisd80 said:

Gone overboard with earnings and savings.

Says taxable earnings £56920.07 and id say around £800 in savings outside and ISA.

How much extra tax would I owe on this? Would it be an extra 20 percent as i am PAYE and have already been taxed on this?

mathematically the answer to that is:

56,920.07 - basic rate and personal allowance 50,270 + 800 interest - 500 starter rate for savings = 6,950.07 @ 40% = 2,780.02 tax.

get taxable earnings below 50,270 and you would not pay any tax at all on the 800 interest. As it stands you are paying 120 tax on 300 of interest rather than 0 on up to £1,000 of basic rate interest 

chrisd80

[Deleted User] said:

chrisd80 said:

Gone overboard with earnings and savings.

Says taxable earnings £56920.07 and id say around £800 in savings outside and ISA.

I am in NHS pension and pay 8.3 percent.

How much extra tax would I owe on this? Would it be an extra 20 percent as i am PAYE and have already been taxed on this?

I understand you can pay into a pension to avoid this but unsure how to go about it.

Can I put it into my existing NHS pension? Would it all have to be paid as a lump sum before 5 April?

Or do I have to open a private pension? Or is it too late or any other options?

I would check with your employer (and it is up to them to check). What is your contracted 37.5 hours salary as, on those earnings (which are after pension contributions) you should be paying 12.5%?

https://www.bma.org.uk/pay-and-contracts/pensions/additional-pensions-advice/nhs-pension-contribution-rates

8.3 percent is correct. My actual salary is a lot lower than £56,000

EthicsGradient

"Says taxable earnings £56920.07" - what says that? If you say "My actual salary is a lot lower than £56,000", then what do you say it is, and why does some organisation disagree?

[Deleted User]

EthicsGradient said:

"Says taxable earnings £56920.07" - what says that? If you say "My actual salary is a lot lower than £56,000", then what do you say it is, and why does some organisation disagree?

Pension contribution rates are based on salary for a 37.5 hour week. Additional hours do not form part of the calculation.

The op clearly does a lot of overtime if £56920.07 is his taxable salary which, of course, is after pension contributions. 

chrisd80

[Deleted User] said:

EthicsGradient said:

"Says taxable earnings £56920.07" - what says that? If you say "My actual salary is a lot lower than £56,000", then what do you say it is, and why does some organisation disagree?

Pension contribution rates are based on salary for a 37.5 hour week. Additional hours do not form part of the calculation.

The op clearly does a lot of overtime if £56920.07 is his taxable salary which, of course, is after pension contributions. 

Overtime and unsocial hours enhancements has pushed it to that figure. Taken from my wage slip for month 12

EnPointe

EthicsGradient said:

"Says taxable earnings £56920.07" - what says that? If you say "My actual salary is a lot lower than £56,000", then what do you say it is, and why does some organisation disagree?

it appears the OP is confusing their  headline spine point  salary  with  taxable earnings  

 someone on band  6   top increment  ( 5 or more years in  band 6 of  acceptable  performance) will have a basic salary of 44 962  gbp / year 

 if that individuals was someone who worked shifts  ( e.g. a Charge Nurse / specialist Nurse,   Emeregncy Dept Radiographer, a Paramedic,  or  was a Duty Officer  in an Ambulance service which has Tech qualified Duty Officers)   they might well  earn around 25 -30 %  on top of that basic  just in shift allowances  even without any   planned overtime or  overruns paid as overtime ...  ( or if they were  a band 6  physio, ODP or radiographer who did on calls) 

 chuck  even  1 shift a month of planned overtime at  150 % of basic ...  and  pretty soon into higher rate tax

EnPointe

[Deleted User] said:

EthicsGradient said:

"Says taxable earnings £56920.07" - what says that? If you say "My actual salary is a lot lower than £56,000", then what do you say it is, and why does some organisation disagree?

Pension contribution rates are based on salary for a 37.5 hour week. Additional hours do not form part of the calculation.

The op clearly does a lot of overtime if £56920.07 is his taxable salary which, of course, is after pension contributions. 

depends on what band they are   56 k after  shift allowances and a bit of  overtime entirely achievable for Band 6  working a rotating shift pattern

 you'd have to be  caneing the over time and  appendix 2 unsocials  to earn  56 k as a band 5 though