40% tax

noitsnotme

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Alitree

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

noitsnotme

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

Alitree

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

It only kicked in last month when i got a small pay rise

Isthisforreal99

Alitree said:

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

It only kicked in last month when i got a small pay rise

Before your pay rise your total income was over £50,270 so you were a higher rate taxpayer

noitsnotme

Alitree said:

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

It only kicked in last month when i got a small pay rise

It’s your total income which counts and that was already over the higher threshold before your recent pay rise.

ColdIron

Alitree said:

ColdIron said:

Alitree said:

question is can i put more into another pension with my current work to offset that

Yes. You can pay into a SIPP or your current pension (if it's a defined contribution one) and HMRC will increase your basic rate band (£37,700) by the amount of the gross contribution (includes your contribution and 20% basic relief). So if you contribute £1,000 your £37,700 will become £38,950 (£37,700 + £1,250) effectively raising the £50,270 threshold to £51,520

Thanks for this but my payroll boss is saying

As the contributions are taken after tax it would not reduce your taxable gross

It's up to HMRC not up to your employer. It won't change your taxable income but it will allow you to pay less tax at 40% (all of it in my example) and more at 20%

Alitree

noitsnotme said:

Alitree said:

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

It only kicked in last month when i got a small pay rise

It’s your total income which counts and that was already over the higher threshold before your recent pay rise.

Yes i thought that but i only started paying the 40% on my pension when my salary tipped over the threshold but my combined salary and pension was already over that amount and i was paying 20% on my pension

eskbanker

Alitree said:

noitsnotme said:

Alitree said:

noitsnotme said:

Alitree said:

noitsnotme said:

@Alitree are you earning £51306 pa from employment PLUS £10800 a year from your pension? So is your total income £62106 per year?  Or is the pension included in the £51306 figure?

Hi, 51,306 from income and 10800 from pension 

Then you were already in the higher tax band before your recent pay rise.

It only kicked in last month when i got a small pay rise

It’s your total income which counts and that was already over the higher threshold before your recent pay rise.

Yes i thought that but i only started paying the 40% on my pension when my salary tipped over the threshold but my combined salary and pension was already over that amount and i was paying 20% on my pension

That simply means that you were temporarily being undercharged - once HMRC cottoned on to your actual aggregate taxable income, one or both of your tax codes would have been adjusted accordingly to ensure that the right amount of tax was collected via PAYE, but as soon as your annual taxable income exceeded £50,270 (pro rata), you were liable to pay 40% on the excess, even if this wasn't automatically being deducted.

sheslookinhot

How long has your total income been £62,106 or indeed over £50,270 ?