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Is your Personal Savings Allowance adjusted with Salary Sacrifice
I was previously a basic rate tax payer and had of PSA of £1000 and would accrue interest greater than £1000 (outside ISA's) and be eligible for additional taxes. My salary increased to the 40% tax rate so my PSA is now £500. If I salary sacrifice into company pension to get gross pay below higher tax rate, is my PSA adjusted?
Comments
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Yes. Sal sac reduces your salary so if that takes your total taxable income below the higher tax bracket you retain the £1K allowance, the interest though could drag you back into 40% tax and the reduced allowance.
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