You may know, there is a nasty tax trap by reference to the gradual withdrawal of the personal allowance if your taxable income exceeds £100,000.This is via a reduction of £1 of allowance for every £2 of excess taxable income.
For 2013/14 the trap potentially applies to even more taxpayers with the increase in personal allowance to £9,440:
| Taxable income |
Marginal rate |
| £100,000 to £118,880 |
60% |
| £118,881 to £149,999 |
40% |
| £150,000 + |
45% |
For 2014/15 the trap is even wider with the increase in personal allowance to £10,000:
| Taxable income |
Marginal rate |
| £100,000 to £120,000 |
60% |
| £120,001 to £149,999 |
40% |
| £150,000 + |
45% |
If you think you could fall in the this trap, contact Inform Accounting and we can advise you of all the possible ways of keeping well clear.
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