Sanity check on tax please?

[Middlechild3]

Confusing myself here but if total income is £59000 once personal allowance is taken off (59000 - 12570) leaves 46430. As 46430 is under 50270 the higher tax rate is it just taxed at 20%. OR as income of £59000 is over 50270 and so into the higher tax bracket is the difference (59000 - 50270) i. e. 8730 taxed at 40%.
I'm confusing myself at this point and just want a sanity check if possible please..

It’s the second one.

• Personal Allowance: Up to £12,570 (0% tax).
• Basic Rate: £12,571 to £50,270 (20%).
• Higher Rate: £50,271 to £125,140 (40%).

so the second one.

ah ok thanks 😕

You can reduce your 40% tax liability by paying more into a pension etc.

Also your personal allowance may not be £12570 if you have taxable benefits or expenses, savings interest over the PSA etc.. The basic rate band is £37,700. As well as pension, Gift Aid etc. can change the numbers. If none of that applies then the second one in your OP.

Is the £59k before or after you pay into a pension? You might be already paying a few thousand a year into your pension from standard contributions so it won't be the full £8730 that you pay 40% on.

But if you can afford to, it's an easy win to increase your pension contributions so the money goes into your pension instead of in tax, but if it's done via a private pension, you'll need to do a tax return for this to happen - but it's fairly simple so not a reason to not do it.

It's the second - and remember ALL income is taxed. Even interest on any savings, unless an ISA.

Unfortunately the amount you can put into an ISA is going down dramatically.

the second, and as you’re into 40% tax bracket, all pay rises, bonuses etc are taxed at 40%.

If you are a BR tax payer you can receive £1000 in interest tax free. HR tax payer can receive £500 tax free.
You can also earn £1,000 tax free from cash in hand/side hustle stuff.