| Top rate of tax from £125,140 p/a 12:23 - Nov 17 with 2504 views | Zx1988 |
What a suspiciously precise figure.
Any reason given for this? Or do we need to start searching for which of Hunt's/Sunak's mates are on £125k p/a? |  |
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| Top rate of tax from £125,140 p/a on 12:27 - Nov 17 with 2464 views | Keno |
its £10,428.33 per month, obvious really |  |
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| Top rate of tax from £125,140 p/a on 12:30 - Nov 17 with 2426 views | clive_baker |
| Top rate of tax from £125,140 p/a on 12:27 - Nov 17 by Keno |
its £10,428.33 per month, obvious really |
Quite. Very suspicious when you think of it like that. |  |
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| Top rate of tax from £125,140 p/a on 12:38 - Nov 17 with 2384 views | noggin |
| Top rate of tax from £125,140 p/a on 12:27 - Nov 17 by Keno |
its £10,428.33 per month, obvious really |
Ask your employer to reduce your wage to 124,999, Keno. |  |
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| Top rate of tax from £125,140 p/a on 12:42 - Nov 17 with 2370 views | DJR |
Over £100,000 the personal allowance is reduced, and once you reach £125,140 there is no personal allowance, so I think this explains the figure.
But why, you might ask is the limit for the personal allowance £125,140?
Over £100,000, the personal allowance is reduced by £1 for every £2 your income is above £100,000. The personal allowance is £12,570 which is half £25,140, thus explaining the £125,140 limit for the personal allowance.
I hope this makes sense. |  | | |
| Top rate of tax from £125,140 p/a on 12:43 - Nov 17 with 2352 views | Zx1988 |
| Top rate of tax from £125,140 p/a on 12:42 - Nov 17 by DJR |
Over £100,000 the personal allowance is reduced, and once you reach £125,140 there is no personal allowance, so I think this explains the figure.
But why, you might ask is the limit for the personal allowance £125,140?
Over £100,000, the personal allowance is reduced by £1 for every £2 your income is above £100,000. The personal allowance is £12,570 which is half £25,140, thus explaining the £125,140 limit for the personal allowance.
I hope this makes sense. |
Gotcha! Thanks for that - much appreciated. | |
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| Top rate of tax from £125,140 p/a on 12:46 - Nov 17 with 2338 views | usm |
They'll be paying 40% anyway, so that 'extra' £140 saves them £7 PA
Harry must be furious |  |
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| Top rate of tax from £125,140 p/a on 12:48 - Nov 17 with 2324 views | Cotty |
This thread highlights how confused most people are about tax bands |  | | |
| Top rate of tax from £125,140 p/a on 12:54 - Nov 17 with 2253 views | XYZ |
| Top rate of tax from £125,140 p/a on 12:42 - Nov 17 by DJR |
Over £100,000 the personal allowance is reduced, and once you reach £125,140 there is no personal allowance, so I think this explains the figure.
But why, you might ask is the limit for the personal allowance £125,140?
Over £100,000, the personal allowance is reduced by £1 for every £2 your income is above £100,000. The personal allowance is £12,570 which is half £25,140, thus explaining the £125,140 limit for the personal allowance.
I hope this makes sense. |
Which means that the rate of tax between income of £100,000 and £125,140 is 60% and the rate then drops to 45% on income over £125,140. | | | |
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| Top rate of tax from £125,140 p/a on 13:06 - Nov 17 with 2192 views | DJR |
| Top rate of tax from £125,140 p/a on 12:54 - Nov 17 by XYZ |
Which means that the rate of tax between income of £100,000 and £125,140 is 60% and the rate then drops to 45% on income over £125,140. |
Yes, I think there has been great criticism of the way this works. But there are ways round it.
https://www.saltus.co.uk/the-financial-planning-journal/earning-over-100k-how-to
Incidentally, the child benefit limit is also unfair and unavoidable because it means in effect that an individual earning £50,001 with a non-working spouse won't get child benefit, but a couple earning £99,000 between them will. [Post edited 17 Nov 2022 13:10]
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| Top rate of tax from £125,140 p/a on 13:08 - Nov 17 with 2175 views | tractordownsouth |
Young Tories on Twitter are furious about this, presumably because expecting someone to reduce their monthly take-home pay from 8.5k to 8.4k is likely to leave them on the brink of destitution. |  |
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| Top rate of tax from £125,140 p/a on 13:09 - Nov 17 with 2160 views | HARRY10 |
| Top rate of tax from £125,140 p/a on 12:46 - Nov 17 by usm |
They'll be paying 40% anyway, so that 'extra' £140 saves them £7 PA
Harry must be furious |
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| Top rate of tax from £125,140 p/a on 13:15 - Nov 17 with 2114 views | SuperKieranMcKenna |
Damn, that means only 4 ski trips this year not 5… | | | |
| Top rate of tax from £125,140 p/a on 13:32 - Nov 17 with 2058 views | XYZ |
| Top rate of tax from £125,140 p/a on 13:06 - Nov 17 by DJR |
Yes, I think there has been great criticism of the way this works. But there are ways round it.
https://www.saltus.co.uk/the-financial-planning-journal/earning-over-100k-how-to
Incidentally, the child benefit limit is also unfair and unavoidable because it means in effect that an individual earning £50,001 with a non-working spouse won't get child benefit, but a couple earning £99,000 between them will. [Post edited 17 Nov 2022 13:10]
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I wouldn't say that's a way around it - it's just pointing out you get tax relief on your pension contributions at your marginal tax rate.
Indeed, the Child Benefit rules are possibly more ridiculous, although (as far as I recall) at £50,001 you start to lose it on a taper rate, losing it all when you get to £60,000. The couple earning £49,999 each lose nothing. | | | |
| Top rate of tax from £125,140 p/a on 13:48 - Nov 17 with 1991 views | DJR |
| Top rate of tax from £125,140 p/a on 13:32 - Nov 17 by XYZ |
I wouldn't say that's a way around it - it's just pointing out you get tax relief on your pension contributions at your marginal tax rate.
Indeed, the Child Benefit rules are possibly more ridiculous, although (as far as I recall) at £50,001 you start to lose it on a taper rate, losing it all when you get to £60,000. The couple earning £49,999 each lose nothing. |
What you say in both paragraphs is true. I'd forgotten the details of the Child Benefit rule. | | | |
| Top rate of tax from £125,140 p/a on 13:51 - Nov 17 with 1969 views | Vaughan8 |
| Top rate of tax from £125,140 p/a on 13:32 - Nov 17 by XYZ |
I wouldn't say that's a way around it - it's just pointing out you get tax relief on your pension contributions at your marginal tax rate.
Indeed, the Child Benefit rules are possibly more ridiculous, although (as far as I recall) at £50,001 you start to lose it on a taper rate, losing it all when you get to £60,000. The couple earning £49,999 each lose nothing. |
Yes it's just the best way to reduce tax at not a lot of expense as you're saving tax.
You can reduce tax by charity donations too, but you don't have that money anymore haha
Anyone earning that amount should get advice from an accountant anyway. | | | |
| Top rate of tax from £125,140 p/a on 13:53 - Nov 17 with 1965 views | itfc_bucks |
| Top rate of tax from £125,140 p/a on 13:06 - Nov 17 by DJR |
Yes, I think there has been great criticism of the way this works. But there are ways round it.
https://www.saltus.co.uk/the-financial-planning-journal/earning-over-100k-how-to
Incidentally, the child benefit limit is also unfair and unavoidable because it means in effect that an individual earning £50,001 with a non-working spouse won't get child benefit, but a couple earning £99,000 between them will. [Post edited 17 Nov 2022 13:10]
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we're caught by this issue and it really, *really* peeves me. | | | |
| Top rate of tax from £125,140 p/a on 14:03 - Nov 17 with 1896 views | Pinewoodblue |
| Top rate of tax from £125,140 p/a on 13:53 - Nov 17 by itfc_bucks |
we're caught by this issue and it really, *really* peeves me. |
Presumably that figure of £50,000 won’t be going up by 10.1% so in effect as inflation increases wages more and more people will find child benefit bring clawed back. |  |
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| Top rate of tax from £125,140 p/a on 14:09 - Nov 17 with 1853 views | DJR |
| Top rate of tax from £125,140 p/a on 13:53 - Nov 17 by itfc_bucks |
we're caught by this issue and it really, *really* peeves me. |
We too, although my eldest has recently left school. | | | |
| Top rate of tax from £125,140 p/a on 14:14 - Nov 17 with 1831 views | DJR |
| Top rate of tax from £125,140 p/a on 14:03 - Nov 17 by Pinewoodblue |
Presumably that figure of £50,000 won’t be going up by 10.1% so in effect as inflation increases wages more and more people will find child benefit bring clawed back. |
Income tax and inheritance tax thresholds are frozen until April 2028, and I don't suppose any other thresholds will be any different. [Post edited 17 Nov 2022 14:15]
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