Getting a bonus Every 2 years

[adywhu]

Hi,

New poster here excuse me if this is a stupid question!

I get paid an amount just below the point where it starts to erode my Tax code, however I get a Bonus yearly that take me above the amount and results in me losing my tax free allowance, if I was to get twice my bonus, every two years than I figure I would only get hit every other year, would this be allowed?

Thanks in advance.

[JRG]

If your employer is prepared to pay your bonus every two years, that would be acceptable, and you should save tax over the two years.

Example 1: Bonus every year
For 2016/17 with £100,000 salary and £23,000 bonus your personal allowance would be nil and your tax would be £42,800.
For 2017/18 with £100,000 salary and £23,000 bonus your personal allowance would be nil and your tax would be £42,500.
Thus, total tax bill over 2 years would be £85,300.

Example 2: Bonus every two years
For 2016/17 with £100,000 salary and no bonus your personal allowance would be £11,000 and your tax would be £29,200.
For 2017/18 with £100,000 salary and £46,000 bonus your personal allowance would be nil and your tax would be £51,700.
Thus, total tax bill over 2 years would be £80,900.

[adywhu]

Thanks, that's how I viewed it, just needed reassurance.

[bd6759]

That would involve your employer re-writing their bonus policy. Tax becomes due when you are entitiled to the income. Delaying payment for 12 months would not affect the the date you became entitled to it unless the policy was changed. Will all the other employees be happy with this?