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Tax allowances/code & 40% band

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pinklady756
pinklady756 Posts: 1 Newbie
First Post
edited 10 July at 9:50AM in Cutting tax
Resolved this now 

Comments

  • Dazed_and_C0nfused
    Dazed_and_C0nfused Posts: 17,597 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    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
    Dazed_and_C0nfused Posts: 17,597 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    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
    Dazed_and_C0nfused Posts: 17,597 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    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.
  • Nomunnofun1
    Nomunnofun1 Posts: 681 Forumite
    500 Posts Name Dropper
    edited 9 July at 5:26PM
    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
    Dazed_and_C0nfused Posts: 17,597 Forumite
    10,000 Posts Fifth Anniversary Name Dropper
    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.
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