UK's 60% HIDDEN TAX RATE - Don't pay this!
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- Опубліковано 22 тра 2024
- This video explains how some tax payers are unknowingly paying 60% tax. I'll show you where this tax rate is hidden and it's not where you might expect.
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How can they get away with that !?
I am in this marginal rate, I know, nice problem to have. However, this stifles investment as I am loath to make more money from investing as the tax paid on it will be 60%. I could put funds into my pension to offset it but I don't have those funds. If you make £5k in the band between £100k and £125k then you have to put £5k into your pension to offset it. On a £10k pay rise in that band (say, £100k to £110k) you will only receive £3,800 due to 60% tax and 2% NI. It is madness but most people do not know that they are paying it which is why it is rarely discussed. It is also not a headline rate like 40% and 45% so never makes the news. Make no mistake though, between £100k and £125k you are paying 60% tax plus 2% NI. If you earn £125k, maybe go down to four days on £100k as you are paying 60% tax on the Friday (5th day).
Why is it asking me for Northern Ireland driving licence option when im a UK resident who owns a UK driving licence?
Fabulous video 👍👍👍🥳
I'm retired with three income streams: UK pension, US pension and income from a property that is rented out to University students. The property was purchased with the help of a mortgage, can the interest payment on that mortgage be claimed as a deduction in HMRC's property section?
thanks for the great video. I understand that a way around this is by paying in everything between £100k and £125,140 into a pension scheme and get tax relief on that. But what happens when you earn over £125,140? Say you earn £150k, at this point does it still make sense to put £25,140 (if you can) into a pension scheme to get tax releif and swerve the 60% tax trap? This is the point at which my brain cant cope anymore and I cant make sense of it haha
No as the £125k-£150k will then drop into the £100k - £125k and you will pay 60% on that. To avoid the 60% you would have to pay £50k into your pension (SIIP)
OK so you say "Don't pay this" How?
Put the difference in a pension to bring you back to under £100K and get the 40% tax uplift to your contribution and missing the penalties over £100K
Interesting, the easy way to avoid this of course is to increase pension contribution.
There's another more common 60% tax trap due to child benefit tax charge. As you probably know a personal earning between £50-£60k with 1 or more kids will have their child benefit removed to £0 @ £60k - not sure of the precise % but its pretty high, especially for larger families, and harsher on single income families.
Who ever thought the child benefit high charge is an idiot, its ludicrous is both parents earn £49k each £98 between them they keep all child benefit but if one parents earns £60k they loose all child benefit!
@@Stormf0rce999 yes, the Gov aware of this as civil servants told them in 2010. The solution would be to means test or force couples to discuss finances "over the breakfast table" and taxes are supposed to be an individuals personal affair even if married i.e. the state cannot force couples to disclose finances to one another. The fudge is the send a letter saying you or your partner maybe over the threshold and they will confirm if either are without giving out exact figures - really stupid in practice.
It also affects new relationships, e.g. a divorcee with 4 kids claiming child benefit, if a new partner moves in (even if not married) can have a deduction on their wages for kids they haven't even adopted.
What is the tax code for 60%
BENDOVER
@@johnr1066 😂
0T
100th like 🎉