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!

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.

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.)

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

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