Strayed into higher rate band for income tax - inventive ways to get back to basic rate?

Grumpy_chap

Every suggestion seems to be around making additional pension contributions, via SS if possible.  That, to me, seems like the most obvious way of seeking to reduce income tax banding.

The OP's title is looking for inventive ways to keep within the basic rate threshold, so may not just the most obvious solution.

Here are some alternatives:

• Make gift aid donations
• Take extra (unpaid) time off work
• EV via SS if available 
• Ensure that any allowable expenses have been claimed and set off against income.  Professional fees, uniforms if not provided by employer, mileage AMAP exceeding actual mileage rate paid by employer, work from home allowance if eligible, sometimes a percentage of union fees, laundry fees in some cases, PPE if not provided by employer

Vitor

Cycle-to-work schemes, company car leases (if ultra-low emission), additional annual leave purchased via salary sacrifice. These reduce P60 pay, but the scope is limited.

fenceposttortoise

EV via SS is a good idea! I like that!
Cycle to work scheme is an interesting idea too.

monkey-fingers

EV via SS is great, but the amount that you'll end up paying isn't that great.

At 54, I was in a similar situation yourself before I recently left my company. I did have a SS car (and other benefits), but I was also throwing loads into my pension. My thoughts being is that I'm 55 next year. I can take out 25% of my pension if I so wish absolutely tax free.

Depending on when you're 54, it it's after April, you'll have to wait until your 57 to do this.

EnPointe

poseidon1 said:

Albermarle said:

I also have a SIPP that I have not made any contributions to for many years

I'm enrolled in the company pension scheme, administered by NEST, paying minimum contribution.

Apart from the usefulness of pension contributions with tax relief, I suspect from your comments above that your pension provision is probably inadequate anyway. So probably something to work on in the next 10 years.

 I'm 53, so still a couple of years before I could access SIPP funds if I had to.

Why would you want to access funds at 55, when they will have to last you maybe another 30 years?

Agree, OP does seem to have distinctly odd priorities here.

 Improving pension prospects after securing a decent pay rise, would be the top of my list of financial objectives, rather than looking for varied alternative means to  reduce tax for the sake of it. Each to their own I suppose.

i would even question if the Op understands what ' income straying to higher rate tax'   actually means for their overall income   in the  band between  entering higher rate tax and 100,001  Gbp taxable income  ( noting the 100 - 125k  taxable income  tax trap where the personal allowance taper starts to bite 
 ) 

Grumpy_chap

EnPointe said:

i would even question if the Op understands what ' income straying to higher rate tax'   actually means for their overall income   in the  band between  entering higher rate tax and 100,001  Gbp taxable income  ( noting the 100 - 125k  taxable income  tax trap where the personal allowance taper starts to bite 
 ) 

That band including up to £100,001 can be quite severe for the final £ if it means the cliff-edge loss of child care.  We have no indication whether that is a concern to the OP.