Is it true that for every pound you earn over 100k, you lose two from your personal allowance?
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.
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
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
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).
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%.
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Good to get the answer though for when I have to complete the wife's tax return.
Is that right?
Pro footballers for one - and it's cheaper coming on here than hiring an accountant.