Reduced personal allowance

foofi22

Hi
I earn ~£65k, does a reduced personal allowance (1168L in my case) reduce the point when the higher rate threshold kicks in?
i,e does the higher rate band start at £49380 for me
Thanks

Dazed_and_C0nfused

foofi22 said:

Hi
I earn ~£65k, does a reduced personal allowance (1168L in my case) reduce the point when the higher rate threshold kicks in?
i,e does the higher rate band start at £49380 for me
Thanks

You can only have a reduced "Personal Allowance" for two reasons, you have applied for Marriage Allowance or your adjusted net income is £100,002 or more.

Presumably you mean reduced tax code allowances.  However your tax code does not change the tax bands at all.

Do you know what is included in your tax code to drop it slightly to 1168L?

foofi22

Sorry I'm not exactly sure what you mean.

I have a 1168L code to account for additional savings interest

Dazed_and_C0nfused

foofi22 said:

Sorry I'm not exactly sure what you mean.

I have a 1168L code to account for additional savings interest

So your Personal Allowance remains £12,570.

And your basic rate band remains £37,700.

But the interest will be taken into account when calculating your actual tax liability.  An estimated amount of interest is included in your tax code but once the actual details are known you could have more tax to pay.  Or you could have paid too much and get a refund.

saajan_12

foofi22 said:

Sorry I'm not exactly sure what you mean.

I have a 1168L code to account for additional savings interest

It just means from your salary they'll work off a lower allowance, because the rest is used up by your savings. That way you don't have to pay tax on the savings part separately. Overall across the savings+salary, you still have the full allowance.