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Any income tax experts in?
WayneK
Posts: 639
Is it true that for every pound you earn over 100k, you lose two from your personal allowance?
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Not quite, the rule is that you lose £1 of allowance for every £2 your adjusted net income exceeds £100k. Adjusted net income is after taking into account things like pension contributions and gift aid payments.WayneK said:Is it true that for every pound you earn over 100k, you lose two from your personal allowance?
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Not a tax expert, but I think it's the other way round. You lose a £1 from your allowance for every £2 you earn over £100K. So I think that means you effectovely pay 51% tax on income between £100K and £120K0
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As a "house husband" I can only laugh at the prospect of earning the sort of income the opening poster talks about.
Good to get the answer though for when I have to complete the wife's tax return.0 -
Not quite. You do lose £1 personal allowance for every £2 you earn over £100k until your personal allowance is all gone, but this makes the effective tax rate 60% (plus EEs NIC).Jints said:Not a tax expert, but I think it's the other way round. You lose a £1 from your allowance for every £2 you earn over £100K. So I think that means you effectovely pay 51% tax on income between £100K and £120K
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Isn't it effectively half the basic rate plus the top rate e.g. for £10K over £100K, you pay 40% top rate (£4K) plus you lose £5K personal allowance, so you pay an extra 20% on that (£1K) so you are paying £5K of your £10K on tax, 50%.
Is that right?
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Which I think was whole point of the OP. People who earn over £100k don't need to come on a football forum to ask tax advice.Addick Addict said:As a "house husband" I can only laugh at the prospect of earning the sort of income the opening poster talks about.
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Possibly so. But I can think of a lot of people who earn over £100K are clueless when it comes to tax.DaveMehmet said:
Which I think was whole point of the OP. People who earn over £100k don't need to come on a football forum to ask tax advice.Addick Addict said:As a "house husband" I can only laugh at the prospect of earning the sort of income the opening poster talks about.
Pro footballers for one - and it's cheaper coming on here than hiring an accountant.0 -
I never said I earn 100k, I wish. Thanks for the info.0
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One more question. If you are on PAYE, should your wages department pick this up and sure you pay the right tax?0
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Except for tax accountants of course! ;o)Addick Addict said:
Possibly so. But I can think of a lot of people who earn over £100K are clueless when it comes to tax.DaveMehmet said:
Which I think was whole point of the OP. People who earn over £100k don't need to come on a football forum to ask tax advice.Addick Addict said:As a "house husband" I can only laugh at the prospect of earning the sort of income the opening poster talks about.
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