Advice On Lowering Your Tax Bill
Sensible measures are available to those looking to minimise the tax they pay.
Where possible workers are being advised to take care that their salaries do not rise above income tax thresholds. For higher earners, passing the £100,000 and £150,000 marks will increase the rate of tax they pay. Income in excess of £100,000 but under £122,000 can incur tax of up to 60%. Above £150,000 and a top rate of 45% tax becomes applicable. Every £2 above the £100,000 threshold will see a reduction of £1 to an individual’s personal allowance.
Around the boundaries it is possible to limit the tax rate being charged by changing the bracket your earnings fall into. Individuals can defer income, contribute to their pension, make payments to a charity or even pass assets that bring an income over to a spouse or civil partner.
Workers can also elect to exchange salary for benefits that are non-taxable. Despite recent tightening of the rules it remains possible to exchange a salary for pension and pension advice, child care, life assurance or ‘green’ initiatives such as cycle to work schemes and company cars with CO2 ratings below 75 g/km.
Tax Advice For Pension Contributions
People can contribute up to £40,000 this financial year towards their pensions whilst still receiving tax relief. This is called the annual allowance. Unused annual allowance from the last three years can be carried into this tax year and added to the £40,000 limit.
Those whose pension pots reach in excess of £1.25m need to claim ‘Individual Protection 2014’ before the 5th of April 2017 in order to protect up to £1.5m from a tax charge. No matter the sum involved it is always important to have the latest information on pensions and tax in order to make informed decisions.
For more help and advice on Pensions please do not hesitate to contact us at Hoskin Financial
THIS BLOG PROVIDES INFORMATION, IT IS NOT ADVICE. ANY OPINIONS ARE GIVEN IN GOOD FAITH AND MAY BE SUBJECT TO CHANGE WITHOUT NOTICE. OPINIONS AND INFORMATION INCLUDED WITHIN THIS EMAIL DO NOT CONSTITUTE ADVICE. (IF YOU REQUIRE PERSONAL ADVICE BASED ON YOUR CIRCUMSTANCES, PLEASE CONTACT US AT HOSKIN FINANCIAL