To ask about the 40% tax bracket

[LauraLorelei]

We've never been well off in any way, and have a severely disabled DD so have lived on the poverty line most of her life so I can be her carer.

DH recently got a much better job and earns 30k, which has made a huge difference. For the first time we aren't scratching around for every penny.

A management opportunity has come up at his company which would be really great for him. He is more than qualified and has a good chance of getting it if he goes for it.

However, the pay is between 33-45k depending on experience etc. Looking it up yesterday I was dismayed to find that the 40% tax bracket would be from 34.5k, which would actually mean a significant pay cut if he was offered over this, and us being very poor again, which makes it seem pointless. It seems really low to be paying 40% and be able to afford the basics. I realise we are in a different situation to most as I suppose I would be earning similar if I wasn't a full time carer and so we are totally dependent on his wage.

Have I read this wrong? Is it worth him even going for this job in our current situation?

Please don't flame me, I am very much in agreement with people contributing and paying their taxes and I would work if I could, but cuts to care packages etc have meant I really can't.

Unless he has a company car or other company benefits and then personal allowance drops right down meaning the 40 % tax. Would kick in sooner

Married couples allowance transfer is a good mention, if you haven't already done this OP please do it, I think it can be backdated to when it was introduced in 2015 but this may start to change (who knows). DO IT TODAY 😁.

Www.gov.uk/apply-marriage-allowance

In addition to what everyone else has said and thresholds and allowances, bear in mind that the difference is not really between 20% and 40%. NI is just income tax by another name, and it is paid at 12% and then 2%, so basic rate tax is 32%, and the higher rate is 42%.

Thank you everyone so much, I can't tell you how wonderful it is - you can tell we have been in poverty our whole lives, this is pretty basic stuff isn't it!

He has no other benefits to go with the job, no car or healthcare, only a company pension. I will look at the married couples allowance, thanks so much for that too.

DH can apply happily now, so brilliant! Thank you all again!

Starting tomorrow, 6 April 2018, the Personal Allowance is 11,850 and Threshold for 40% Tax is 46,350. So anyone whose gross earnings are 46,350 or less per year will not be subject to 40%Tax. However, as some PP have said the Personal Allowance may be reduced if the employer provides Benefits in Kind (Car, Laptop, mobile phone, etc.)

Well good luck your DH :)

As previously stated, if your DP has any additional benefits that are classed as benefit in kind such as health insurance, the taxman considers them as taxable income, so you need to include any such benefits when totting up the 40% portion of tax he will need to pay.

Also if your DH does end paying 40% which he might in time you can increase pension contributions instead. Most people don't put away anything like enough into their pension and this is one way you can increase contributions without necessarily losing money in take home pay as it would be lost in tax anyway.