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Where Taxpayers and Advisers Meet

Tax Tips for income over £100k

ssm_tax
Posts:3
Joined:Wed Feb 17, 2021 11:07 pm
Tax Tips for income over £100k

Postby ssm_tax » Wed Feb 17, 2021 11:19 pm

Hi - I'm expecting my income to cross just 100k. The only source of income is salary. Any last-minute advice keeping the income below the 100k mark.
Salary sacrifice is not an option.

Thanks

NickPrice
Posts:38
Joined:Fri Sep 11, 2015 12:39 am

Re: Tax Tips for income over £100k

Postby NickPrice » Mon Mar 08, 2021 7:59 pm

Do you have a SIPP? Otherwise it is not too late to open one and build up your pension tax free. Nice position to be in though: 100K

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Tax Tips for income over £100k

Postby robbob » Mon Mar 08, 2021 8:56 pm

pension or give money to charity are the obvious ones

Note ensure you are looking at the correct "adjusted" number - taxable pay (not gross pay) and if you have made pension payments deducted from net salary or added directly from yourself already this tax year those payments would need to be grossed up and deducted from ypur taxable pay to work out your adjusted income for 100k purposes.

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: Tax Tips for income over £100k

Postby darthblingbling » Mon Mar 08, 2021 9:12 pm

Could always give money to me? In return I'll give tax advice

ssm_tax
Posts:3
Joined:Wed Feb 17, 2021 11:07 pm

Re: Tax Tips for income over £100k

Postby ssm_tax » Thu Mar 11, 2021 9:07 pm

Thanks, everyone for the reply. I wish to be in this situation every time :).
This is a one-off payment so I've not factored that with pension deduction as salary cut-off has passed.
In relation to SIPP or Charity: I do have a SIPP from my previous employer. Do I've to do anything after adding the extra money to SIPP or giving to charity? I mean do I need to file a self-return or something? The reason for asking is I've received tax-free child care and now my taxable pay has come to few hundreds pounds above the 100k mark. I came to know this in Feb. So do I need to do anything now?

Thanks

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Tax Tips for income over £100k

Postby robbob » Thu Mar 11, 2021 9:36 pm

Per hmrc one of the criteria for completing a tax return is if your income is over 100k , technically its possible you may not need to register if you won't owe any money (not 100% sure on tis but highly likely) but its reasonably certain if the p60 says income >100k then hmrc will go ahead and issue the tax return anyway- this being the case you are best to register for self assessment. If hmrc issue a return and won't cancel due to salary beoing over 100k then you MUST comply with their demands - ie once issued its up to hmrc whether they cancel or not.

If you ever have salary sacrafice options to get you p60 salary + other income below 100k then thats a useful plan to get rid of the tax return issue.

ben_power
Posts:81
Joined:Tue Feb 27, 2018 8:34 pm

Re: Tax Tips for income over £100k

Postby ben_power » Fri Mar 12, 2021 7:22 pm

If you can't contribute into your work pension then the SIPP is best and you do have time for this tax year. You should consider the annual allowance being £40,000 but given your taxable income will be c£100k you can utilise carry-forward and utilise unused annual allowance from the previous 3 tax years.

Your SIPP provider will claim basic rate tax relief back for you (normally within 6-8 weeks) but you will need to complete a self-assessment tax return to claim the additional 20% higher rate tax relief though, make sure you remember to do this!

iwmtaxadvisor
Posts:45
Joined:Wed Sep 09, 2020 5:12 pm
Contact:

Re: Tax Tips for income over £100k

Postby iwmtaxadvisor » Sun Mar 21, 2021 11:56 am

Expenses from working at a home office - as long as you don't claim the standard deduction, but itemise (to use a US expression), you can often reduce the taxable amount by 1000 and sometimes by 5k +. The test at the bottom of this page is HMRC's preferred view, not quite the legal position. https://www.gov.uk/tax-relief-for-employees/working-at-home
Robert Warren
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Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: Tax Tips for income over £100k

Postby Jholm » Tue Mar 23, 2021 1:51 pm

@robbob

HMRC told me last year that they have pushed the earnings limit to £150k in an attempt to remove people from SA. Weirdly, last time I checked, their guidance still showed £100k but I have been successful in withdrawing TRs > £100k < £150k.

Typically, most telephone advisers at HMRC don't know this until you ask them to check.

Just an FYI as it's possible they may stop auto-issue of TRs for people in this earnings bracket.

ssm_tax
Posts:3
Joined:Wed Feb 17, 2021 11:07 pm

Re: Tax Tips for income over £100k

Postby ssm_tax » Fri Mar 26, 2021 2:50 pm

Thanks, everyone for the response. I'm going to save some money on SIPP.
As I understand, this will keep the salary below 100K but I may still need to fill the self-assessment form.
Will this keep my eligibility for the tax-free child?

Thanks


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