well got my yearly bonus today & ffs it has taken me into the 40% tax bracket :rant: :rant: :rant:

 

so my monthly wage & bonus was taxed to a massive 40% :rant: :rant:

 

is there anyway around this?? :nelson:

Don't tell mr tax man about your bonus and ask for it in cash :rofl: lol

is there anyway around this?? :nelson:

Earn less. ;)

 

 

Or lie about it. :x:

doh cant do it as its quite a big employer & they sort the salary out

doh cant do it as its quite a big employer & they sort the salary out

 

I was going to suggest one of those composit companies but if you are paid by the company as PAYE then it wouldn't work. you will only pay thehigher tax on the money over the bracket (around 34K) ??? I think. so if you earned 36K then its normal rate on 34K and the higher on the remaining 2K. I know this sounds obvious but I dont know how much you know? I aint sure of the exact figures but I am close with my calculations? What is true is you dont pay 40% on the whole lot.

 

HTH Vini

afraid so paye bit of a pita !! yep have reached the tax band which i think is 38k did a lot of overtime see !!!!

 

so my next wage will be 40% tax as it will still be in the same tax year, then after next month start from the begining but maybe less of the overtime,

TBH mate if your in the 40% tax bracket like me (i dont pay tax lol) you can always ask your boss not to get a bonus or get a raise but you will be silly to do that. you earn good dosh mate so just deal with the tax, theres nothing you can do especially if your PAYE, if you were self employed or filled out a P85 resident outside the uk, then there is loads you could do to escape the tax.

 

sorry my friend

 

karl

aye tax if a killer, i lose 40% which pi55es me off but hey i would rather be earning it ;)

 

think year to date ive paid about £23-25k in tax so far :( makes me sick to think what i could have done with all that lovely money!!

I dont earn enough to reach the 40% bracket, but after cashing in some shares for 1200 pounds, then had to send back 550 pounds in tax back, because of being on a month one basis :( so got hit for 40 percent.

 

Feb is normally our bonus month, so probably going to get hit the same way, not happy.

 

Barry

so my next wage will be 40% tax as it will still be in the same tax year, then after next month start from the begining but maybe less of the overtime,

 

Not strictly true..

 

Your salary and tax is worked out for every payment.

 

So lets assume you earn 50k, and that your tax allowance is 300L. (this is the tax code on your payslip and the number refers to the amount you are allowed to earn before you start to pay tax), and the higher rate income tax 40% tax bracket is £34k+

 

 

 

So for this month you would have a gross salary of £4166.00 (50k/12)

 

then your employer deducts you tax allowance of £300 (300L = 3000/12)

 

so your taxable amount is gross salary - taxable allowance £3866 (4166-300)

 

we now need to work out the tax on this. this is just £34k/12 = £2833. Everything over that is taxed at 40%. (Taxable salary £3866 - standard rate taxable amount £2883) = £983 to pay 40% on.

the rest is taxed at standard rate income tax.

 

 

Total salary would =

 

£300 Tax allowance = £300

£2883 Taxable at standard rate = £2883-17.5% (504) = £2378

£983 Taxable at higher rate = £983-40% (393) = £589

 

So for the £4166 you earned you would walk away with £3267 after tax.

 

this does not take into consideration other deductions like NI or anything else you might have.

 

Now to answer your original question "is there anything I can do to avoid paying 40%?" Yes, ask your employer to pay your bonus each month (so you salary is only increased by (bonus/12) and hope that doesn't take you over the 40%.

 

To answer the second question "will I have to pay 40% on the rest of my salary" no, as above it's worked out monthly. It should average out over the year. and if it doesn't - they still get it back in the self assesment!

 

Just swap the figures for your own real figures to work out your own salary stuff....

 

Hope this helps.

you could always pack in work go on the dole and claim every benefit available, you would probably be better off and wouldnt have to pay any tax

 

it might sound daft, but its not, such is the state of this country and the sill barstewards that run it

Wait till you get to 60%, then you`ll be pissed off!!!

 

Bob

I thought 40% was the top bracket?

 

Anyway I got no sympathy for any of you with your high earnings. :tongue:

I thought 40% was the top bracket?

 

Anyway I got no sympathy for any of you with your high earnings. :tongue:

You`re right, always thought there was a higher one but £33,300 is the 40% bracket

I thought you didn't have to pay 40% unless you earned over £38K?????

 

 

 

 

 

 

My dad told me under old Labour years ago there was a 95% tax bracket :eek:

Not strictly true..

 

Your salary and tax is worked out for every payment.

 

So lets assume you earn 50k, and that your tax allowance is 300L. (this is the tax code on your payslip and the number refers to the amount you are allowed to earn before you start to pay tax), and the higher rate income tax 40% tax bracket is £34k+

 

 

 

So for this month you would have a gross salary of £4166.00 (50k/12)

 

then your employer deducts you tax allowance of £300 (300L = 3000/12)

 

so your taxable amount is gross salary - taxable allowance £3866 (4166-300)

 

we now need to work out the tax on this. this is just £34k/12 = £2833. Everything over that is taxed at 40%. (Taxable salary £3866 - standard rate taxable amount £2883) = £983 to pay 40% on.

the rest is taxed at standard rate income tax.

 

 

Total salary would =

 

£300 Tax allowance = £300

£2883 Taxable at standard rate = £2883-17.5% (504) = £2378

£983 Taxable at higher rate = £983-40% (393) = £589

 

So for the £4166 you earned you would walk away with £3267 after tax.

 

this does not take into consideration other deductions like NI or anything else you might have.

 

Now to answer your original question "is there anything I can do to avoid paying 40%?" Yes, ask your employer to pay your bonus each month (so you salary is only increased by (bonus/12) and hope that doesn't take you over the 40%.

 

To answer the second question "will I have to pay 40% on the rest of my salary" no, as above it's worked out monthly. It should average out over the year. and if it doesn't - they still get it back in the self assesment!

 

Just swap the figures for your own real figures to work out your own salary stuff....

 

Hope this helps.

 

Basically as above. You only pay 40% on the amount you earn over the threshhold.

 

Next year however you will get a self assesment form which means you will end up having to declare savings shares etc.

 

You will need to fill this form in as you end up getting a £100 fine.

 

Tax, don't you just love it.

 

Hope this helps.

 

Darrell

I thought you didn't have to pay 40% unless you earned over £38K?????

 

 

 

 

 

 

My dad told me under old Labour years ago there was a 95% tax bracket :eek:

 

 

From Gov Tax/HM Customs

Taxable Bands Taxable Bands Allowances

2005-06 (£) 2006-07 (£)

 

 

Starting rate 10%

0 - 2,090 0 - 2,150

 

 

Basic rate 22%

2,091 - 32,400 2,151 - 33,300

 

 

Higher rate 40%

over 32,400 over 33,300

From Gov Tax/HM Customs

Taxable Bands Taxable Bands Allowances

2005-06 (£) 2006-07 (£)

 

 

Starting rate 10%

0 - 2,090 0 - 2,150

 

 

Basic rate 22%

2,091 - 32,400 2,151 - 33,300

 

 

Higher rate 40%

over 32,400 over 33,300

 

Well I never - very interesting / useful info there. Thanks.