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What is the cut off point that would stop me being in the higher tax bracket? It seems like I'm working for nothing, what would my optimum salary be?
Tim, thank you for your reply.The cut off point for Tax year 2013/14 is £32,010 of taxable income or gross income of (32,010+9440) = £41,450.Once your gross earnings exceed £41,450 then you will be paying 40% tax on additional income.The rates for tax year 2014-15 areHigher rate threshold £41,865 - (optimum income from all sources)Personal allowance £10,000
First £31,855 of taxable income attracts tax at basic rate of 20%.
Thereafter additional income would attract tax at 40%.I hope this is helpful and answers your question.