Higher tax rate and childcare vouchers/company car

[Dudess]

Hullo

My partner is about to be promoted into SMT level, with possible 45k + salary. I freelance, and don't bring in any serious numbers (2k a year?) but we have the max childcare vouchers and wondered if anyone had experience of jumping to the next tax bracket of 40%?

Also, do you have a company car? How does the tax work? He will be able to negotiate his new salary but not sure what numbers to go for.

Thanking you!

[Ellypoo]

With Childcare vouchers, if he becomes a higher rate tax payer, then the max he can get each month is £124 (rather than the £243 that he will currently be entitled to).

With company cars, the taxable benefit is calculated as a percentage (based on CO2 emissions and fuel type) of the list price. This is the amount that he will pay tax on each year.

[LIG1979]

If he is around 45k -there may be a way to reduce his taxable pay e.g by pension contributions to bring it below the 40% tax bracket. Also, how long as he been claiming the vouchers? People who have been claiming a fair few years are on an old system and can still claim the higher amount even if higher rate tax payers. (Sorry I don't know any details about this but I am sure someone else will.)

[Dudess]

Thanks, Elly and LIG, will look into the pension options, hadn't thought about that.

[GarthsUncle]

I think the HRT continuation for vouchers only applies if you were paying HRT when the law came in.