Methods to Reduce Higher Rate 40% Tax Exposure
Hello all, I was hoping to ask some advice about ways to reduce my exposure to the 40% income tax band rate, if possible.
Bit of background...
Current Employment Base Salary: £32.5k
Estimated Gross Profit Income from rental property in the 21-22 tax year: £40k
Unexpected Overtime and Bonus from Employment: £3k
Single, no children.
ISA's maxed out for this tax year.
I currently am salary sacrificing the maximum amount that is legally allowed into my employers pension scheme (So essentiallyI still earn minimum wage for hours worked in my contract) which over the last few years up until this current tax year has kept me just below the 40% threshold.
This year I have not had to do as many repairs to my rental properties as expected, as my tenants have not turned over this year which has reduced repairs to damages further, and also I have not lost income due to void periods. Also my employer decided to pay out several chunks of weekend work as overtime rather than the usual time in lieu, which was an unexpected addition to income.
My goal would be to ideally use this time between January and April to make some changes (if and where possible) in order to reduce my 40% tax exposure, to reduce my tax bill, and should I be able to drop it back below the threshold somehow, preserve my personal savings allowance of £1,000, without it dropping to the higher rate band of £500.
Is there anything further I can do with my pension in order to reduce the 40% liability, such as one off additions into my company pension. I know this is possible on the Aviva website, and I am aware there is an overall £40k per year limit for addition into pension without penalty, but I was unsure if this would affect my income in terms of consideration towards the higher rate band.
Is there any other methods I could consider, or have I done everything I can now to minimise this?
Any advice or feedback greatly appreciated!