Higher Rate Tax Bands

Anyone got any ideas on what to do with income over £46k? I.e when you hit the 40% tax rate? I figure boosting pension contributions is the easiest way but wondered if anyone was more clued up than I! Once you start studying accountancy everyone thinks that you’re their personal tax advisor and as I’ve never had this problem I’ve never really looked into it!

Ps. Advice will not be taken - just ideas for further research and discussion :bulb:

1 Like

Does you work offer anything which is tax efficient like life insurance, health/dental insurance, buying holidays etc?

1 Like

Asking for a friend :see_no_evil:

But it’s just standard stuff - vitality heath insurance (P11d’able), salary sacrifice pension and then nothing else to speak of really :unamused:

1 Like

As we are not talking footballers amounts then salary sacrifices (I pay for extra pension & annual leave) followed by increased pension contributions are clear winners.
I’m guessing they can’t take cash in hand thus avoiding the lovely tax man.
As a 40% tax payer I just deal with it as neither May or Corbyn are not going to change anything soon.

1 Like

We’re not - but we all try and get the best savings rate by moving from one saving account to the next when you can just get an extra boost by not paying that top rate by increasing pension contributions for example.

Flip side is a LISA but I’m not sure I trust them…

1 Like

I discussed this with our company pension adviser a few months ago, she basically told me the best way is to increase pension contribution and take a loan from the company which they can deduct from salary before tax every month which means Gross income will come down.

On higher tax - another thing to remember is that as soon as you or your partner cross 50k/pa and if you are claiming child benefit (Which you should because of NI & state pension implication) you will have to do self-assessment and pay tax on child benefit.


Unless you are over 60K, and then you just select the “do not want to receive child benefit” option (I think).

Well you can still keep claiming put that into a high interest saving account and pay tax on it - That was the advice I was given because if you stop claiming child will have to apply for NI number, they will not get one automatically.

1 Like

So, I’m a little wooly on the details, and this may be wrong.

But I thought you could chose the option not to claim it, not need to fill in any self assessment form, but still be “registered” for the NI stuff?

Wooly as you here :slight_smile:

I’ll check later.

1 Like

The only thing I do know, is how bloody ridiculous the system is.

Parent A earning 50K and Parent B earning 50K can claim the MAX child benefit.


Parent A earning 60K and Parent B earning 0 can claim absolutely nothing.

I mean… C’mon… Does it really need to be spelled out for the people who make this up?


Totally agree!

My tax code is 405L :disappointed_relieved:

1 Like



Wish earning over £60k or even £50k was a problem I had…no kids though (or money black holes as I tell the better half)!

1 Like

I’m sad and glad I don’t have these kind of problems!

I thought mine was bad at S895LX :confounded:

Absolutely that!

I couldn’t believe it when it was announced. A household on £100K (using 2 personal tax allowances!) get the full benefit and a household on £60K (using 1 personal tax allowance) get nothing.

I understand it’s all relative and for those with a lower combined income it’s wholly irrelevant. For those who may be somewhat better off, however, it offers a very clear value judgement of people who take time out of work to look after children.


So, for people reading this thinking “if you earn 60K, you shouldn’t complain” - I hear you.

But here’s a very generic calculation regarding the parent on less income.

Lets say Parent A is the 60K earner, whose out at work all day.

Parent B can either go to work, and put the kids in child care - Or they can stay at home and be a full-time parent.

It’s also worth pointing out that putting young children in nursery etc, can do wonders for their development anyway. But we also have situations around taking/picking up from school to consider as they get older.

If Parent B earns 20K - That’s a take home salary of “around” £1,400 per month.

Probably just enough to cover childcare costs for 1 child - But not 2.

So what does Parent B do?

Work, and see all of their money disappear into childcare costs?

Not work, and potentially have more money and time with the children, but possibly not give the child the development they need?

It’s a horrible situation, and one that is incredibly unfair on so many people - But just because there is this stigma over “One of you earning 60K”, it’s assumed you are absolutely minted, when it can often be far from the case.


Work does not pay in some situations and our Govt. has created this system!

In London, 60K does not go far tbh.

I could not have put this better.

1 Like

We have this exact situation. Not quite hitting the £60k yet so we get it and have to pay nearly most of it back. :triumph:

We’ve gone for the live on one salary approach. My wife is self-employed so that helps with doing some small jobs at weekends, but I feel for those that don’t have that flexibility.

We don’t have to scrimp but we still have to be careful with money. Monzos budgeting has been ace for staying on track each month.


Tend to find that up here… if you’re on 30k+ you’re minted… (general perception)

But then the average salary (for April 2017) was just over 23k (for Scotland), UK wide was £23,474