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DON’T LOSE YOUR PERSONAL ALLOWANCE…


For every £2 that your adjusted net income exceeds £100,000, the £11,850 personal allowance is reduced by £1. This results in an effective personal income tax rate of 60%.

Pension contributions and Gift Aid can help to reduce adjusted net income and save tax.

The restriction applies between £100,000 and £123,700 adjusted net income.

Another way that you could avoid this trap would be to agree with your employer to sacrifice some of your salary in exchange for a tax-free benefit in kind.

These rules changed from 6 April 2017 but employer pension contributions, bicycles, and employer provided childcare would continue to be tax effective.

#tax #personalallowance

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Evans Accountants is the trading name of David H Evans Ltd, Company registered number: 4666707 Registered in England and Wales. Registered by the Institute of Chartered Accountants in England and Wales to carry out company audit work.