About Us Join as a Professional
Contact Us
Professionals UK United Kingdom Bedfordshire Belfast Berkshire Birmingham Bristol Buckinghamshire Cambridgeshire Cardiff Cheshire Chester Devon Edinburgh Essex Glasgow Hampshire Hertfordshire Kent Lancashire Leeds Liverpool London Manchester Newcastle Nottingham Oxfordshire Sheffield Surrey Sussex Warwickshire Yorkshire Europe Amsterdam Berlin Brussels Dublin Ireland Madrid Milan Monaco Paris Stockholm Zurich United States Chicago Los Angeles Miami New York San Diego San Francisco San Jose Texas United Arab Emirates Dubai
Categories
  • {{ category.title }}

Please select category on the left first.

If you cannot find what you are looking for or if you have a very specific enquiry, please use our "Send Enquiry" feature.

{{ category | displayCategoryName }}
{{ child.name }}

Showing results in {{ selectedLocation.name }}

Suggestions
  • {{ suggestion.name }}
Categories
  • {{ category.name }}
Suggestions
  • {{ suggestion.name }}
Professionals
Public users
Companies
Articles
Locations
  • {{ locationSuggestion.name }}
There are no results for {{ query }}
Articles & Events Posts
Request a Service
About Us Join as a Professional
Contact Us
Professionals UK United Kingdom Bedfordshire Belfast Berkshire Birmingham Bristol Buckinghamshire Cambridgeshire Cardiff Cheshire Chester Devon Edinburgh Essex Glasgow Hampshire Hertfordshire Kent Lancashire Leeds Liverpool London Manchester Newcastle Nottingham Oxfordshire Sheffield Surrey Sussex Warwickshire Yorkshire Europe Amsterdam Berlin Brussels Dublin Ireland Madrid Milan Monaco Paris Stockholm Zurich United States Chicago Los Angeles Miami New York San Diego San Francisco San Jose Texas United Arab Emirates Dubai
Categories
  • {{ category.title }}

Please select category on the left first.

If you cannot find what you are looking for or if you have a very specific enquiry, please use our "Send Enquiry" feature.

{{ category | displayCategoryName }}
{{ child.name }}

Showing results in {{ selectedLocation.name }}

Suggestions
  • {{ suggestion.name }}
Categories
  • {{ category.name }}
Suggestions
  • {{ suggestion.name }}
Professionals
Public users
Companies
Articles
Locations
  • {{ locationSuggestion.name }}
There are no results for {{ query }}
Articles & Events Posts
Request a Service
06.06.2022

A million to pay 60% income tax within years

poster-image
Nadia Khan DipPFS Cert CII (MP), Wren Sterling

A million to pay 60% income tax within years

twitter icon
  • Nearly a million more workers face paying 60% income tax within a matter of years because of fast-growing earnings, analysis for Telegraph Money shows.
  • Higher-rate taxpayers who earn between £100,000 and £125,000 a year lose their £12,570 tax-fre personal allowance on a sliding scale. For every £1 they exceed the threshold, 50p of the personal allowance is lost. As a result, every £1 earned between the two amounts effectively incurs 60p of income tax. After £125,000 all of the personal allowance is lost and the marginal tax rate reverts to 40%.
  • Roughly 336,000 people are currently caughter every year by the quirk of the “marginal” rate tax system but this figure is on track to soar over the coming years thanks to rampant inflation.

How to beat the tax trap

  • Higher earners can reduce their taxable income and stay below the £100,000 threshold by paying more into their pension. Workers can forgo wages and ask their employers to pay the money directly into their retirement pots instead via “salary sacrifice”.
  • Many employers offer such schemes, as they benefit from paying considerably less in National Insurance contributions. The worker pays less in NI too and also benefits from income tax relief on what they put in.
  • For example, someone who earns £100,000 and receives a £10,000 pay rise would pay £6,325 in income tax and NI on their new earnings. By sacrificing this for a pension contribution, there is no NI to pay and they can claim income tax relief of 40%. This would leave them with £10,000 in their pot and they would lose just £3,675 to the taxman.
  • NI saving
  • personal allowance
  • Pension contribution
  • Salary Sacrifice
poster-image
Nadia Khan DipPFS Cert CII (MP) Wren Sterling

I am an Independent Financial and Mortgage Adviser and have worked in Financial Services for over 12 years. During my career I gained experience in assisting both individual and corporate clients.…
Follow us for more articles and posts direct from professionals on      
Facilitator, Facilitation, Meeting Coordination

Meetings: a vital part of running a business or a waste...
Meetings are a necessary but often frustrating part of working. We spend hours and hours a week in meetings, but we…
The Business...
The Business...
Business Consultant

Would you like to promote an article ?

Post articles and opinions on London Professionals to attract new clients and referrals. Feature in newsletters.
Join for free today and upload your articles for new contacts to read and enquire further.