Bespoke Tax Accountants

Specialist tax advice, accountancy and tax returns

01242 505970
info@bespoketax.com

  • Home
  • About Us
    • Meet The Team
    • Careers
    • Statutory Information
    • Privacy Policy
  • Who We Help
    • Personal and Family
    • Business
    • Our Clients
  • News
    • Making Tax Digital
  • Giving Back
  • Contact
  • Cloud Accounting
    • Xero

Be wary of 60% Income Tax charge

17th July 2019 By bespoketax

Be wary of 60% Income Tax charge

For high earning taxpayers the personal allowance is gradually reduced by £1 for every £2 of adjusted net income over £100,000 irrespective of age. This means that any taxable receipt that takes income over £100,000 will result in a reduction in personal tax allowances.

Your adjusted net income is your total taxable income before any personal allowances, less certain tax reliefs such as trading losses and certain charitable donations and pension contributions.

This means that for the current tax year if your adjusted net income is likely to fall between £100,000 and £125,000, you would pay an effective marginal rate of tax of 60% as your £12,500 tax-free personal allowance is gradually withdrawn. If your income sits within this band, you should consider what tax planning opportunities are available in order to avoid this personal allowance trap by trying to reduce your income below to £100,000. This can include giving gifts to charity, increasing pension contributions and participating in certain investment schemes.

Carry-back opportunity

A higher rate or additional rate taxpayer who wanted to reduce their tax bill could make a gift to charity in the current tax year and then elect to carry back the contribution to 2018-19. A request to carry back the donation must be made before or at the same time as the 2018-19 Self-Assessment return is completed (by 31 January 2020).

 

Filed Under: Uncategorised

Recent News

  • New measures to help with the cost-of-living crisis
  • Domicile and IHT
  • Agent authorisation re SEISS grants
  • HMRC wins disguised remuneration case

News Categories

  • Budget Summary
  • Business
  • Business Support
  • Capital allowances
  • Capital Gains Tax
  • Company Secretarial
  • Construction Industry Scheme
  • Corporate Governance & Regulation
  • Corporation Tax
  • Customs Duties
  • Duties
  • Employee Benefits
  • Employment & Payroll
  • Employment Law
  • European Union
  • Family Tax Credits
  • General
  • HMRC notices
  • Income Tax
  • Inheritance Tax
  • National Insurance
  • NIC & Pensions
  • Other duties
  • Overseas personal tax issues
  • Overseas tax issues
  • Payroll
  • Pension
  • Personal
  • Practice News
  • Stamp duty
  • Stamp Duty Land Tax
  • Tax credits
  • Tax Diary
  • Value Added Tax

About Us

Bespoke has a reputation for helping our clients make the most of their financial situations and in turn we have become a trusted extension of their business or family.

Bespoke assist with compliance requirements, providing specialist tax advice, and planning for now and the future.

Keep informed.
Sign up for our Topical Newsletter

Our FREE monthly newsletter will keep you up to date with the latest news related to the world of accountancy.

Register Here

Contact

Delta Place,
27 Bath Road, Cheltenham,
Gloucestershire, GL53 7TH
01242 505970
info@bespoketax.com

ICAEW Chartered AccountantsXERO Gold PartnerChartered Institute of TaxationMember of EISA

Copyright © 2022 · Bespoke Tax Accountants · Website by Culpepper & Co

.