Tax allowances/code & 40% band

pinklady756

Resolved this now 

Dazed_and_C0nfused

pinklady756 said:

Tax code 1359. The calculators show that allows earnings of 51299 without any falling into the 40% band.

Looking to pay into AVC’s as income is just falling into 40%. But do we use 50270 or 51299 to calculate AVC contributions?

Would the same apply to marriage allowance?

Tax calculators often don't give you the full picture.

You need to know the breakdown of your tax code to understand it properly.  If your tax code includes Marriage Allowance (you being the recipient) then that does not actually change your higher rate threshold.  It knocks £252 off your tax liability.  If you remain eligible for Marriage Allowance.

Dazed_and_C0nfused

pinklady756 said:

The tax code doesn’t include marriage allowance. But we would be able to apply if we got earnings low enough

So what is in it which (presumably) adds to the standard 12,570?

Dazed_and_C0nfused

pinklady756 said:

Dazed_and_C0nfused said:

pinklady756 said:

The tax code doesn’t include marriage allowance. But we would be able to apply if we got earnings low enough

So what is in it which (presumably) adds to the standard 12,570?

Expenses work clothes/uniform and I think he gets something else I just know the tax code is 1359. We also want to be able to get marriage allowance as I’m non tax payer, so need to work out what to keep his earnings under

Until you know the full breakdown you cannot possibly know what to keep his earnings under.

It may be he has expenses of ~1,000.  Which would effectively make his basic rate threshold £51,270 rather than £50,270.  But it's all guess work without knowing why his code is 1359L/T/M/N.

[Deleted User]

pinklady756 said:

It’s all expenses so £1015 on top the 12570 to make the tax code. So 40% doesn’t start until after 51299 I think 

For the marriage allowance does it still need to be under 50270?

First point - It would be £51285 ignoring pension contributions, whichever method he contributes. 

Second point - No. It would be £51285. Same reasoning as first point. 

Perhaps you could clarify pension contribution amounts and method?

Dazed_and_C0nfused

pinklady756 said:

[Deleted User] said:

pinklady756 said:

It’s all expenses so £1015 on top the 12570 to make the tax code. So 40% doesn’t start until after 51299 I think 

For the marriage allowance does it still need to be under 50270?

First point - It would be £51285 ignoring pension contributions, whichever method he contributes. 

Second point - No. It would be £51285. Same reasoning as first point. 

Perhaps you could clarify pension contribution amounts and method?

Thanks. Pension contributions salary sacrifice, 8% and employer 13%

He cannot deduct those as they are actually employer contributions.

But he has a lower taxable income figure to start with as a result of using salary sacrifice.