Date posted: 3rd Mar 2020
For every £2 that your adjusted net income exceeds £100,000 the £12,500 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.
The restriction applies between £100,000 and £125,000 adjusted net income. Another way that you could avoid this trap would be to agree with your employer to sacrifice some of your salary in exchange for a tax-free benefit in kind such as an additional pension contribution.
If any of the updates in this article raise any issues for you or your business, please contact our Tax team here or call us on 01325 349700.
Read more below:
- Changes to paying capital gains tax on residential property on April 6th
- Conservative party elected with working majority
Read more March 2020 tax news below:
- The employment allowance – new rules
- Yet another chancellor – Big changes in the Budget?
- Inheritance tax in the spotlight
- Will pension tax relief change on the budget?
- Consider other tax efficient investments
- Buy new equipment before 6th april
- Year-end tax planning – CGT, ISA’s and pension planning