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Personal allowance tapers after 100k, making the effective marginal rate 60% between 100-125k. If you include student loan payments too, it's actually more like
by ubercow13 4y ago
Personal allowance tapers after 100k, making the effective marginal rate 60% between 100-125k. If you include student loan payments too, it's actually more like 69%!
There are other even more extreme marginal rates hidden in the tax system if you have children, I believe there are even some circumstances of >100%
- curiousguy 4y agoYou can easily put money in your pension and avoid the tax. So if you’re making 125k and put 25k in your pension, you will only pay taxes on 100k. Take advantage of tax wrappers and UK tax is kind of okay when comparing with other countries.
- ubercow13 4y agoAbsolutely. The 60% marginal rate will still kick in somewhere though, with the recent increase in annual pension allowance I guess it would be 160-185k, which would actually make it 65% as it'd be on top of the additional rate.
- Aeolun 4y agoBetween 100k and 125k, but your average/effective tax rate is still around 40%.