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bigduckontax, Accountant
Category: Tax
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I earn £47400 a year and pay 11% into my company pension. I

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Good afternoon,I earn £47400 a year and pay 11% into my company pension. I will be getting a 1 off bonus of £8950 this tax year and I have a tax code of 1112L. My question is how much bonus could I take home without breaking into 40% tax? Could I also claim marriage allowance if my wife earned in the region of £7000 for the year? Thank you very much for looking at my question. Matt

Hello Matt, I am one of the experts on Just Answer and pleased to be able to help you with your question.

Your wife could transfer 10% of her Personal Allowance (PA) to you, but she has to do that herself. That would increase your tax code to 1227 and reduce your PAYE Tax deductions.

Your income after deducting your pension contribution is 42186. Now deduct your PA of 11500 leaves 30686 exposed to tax. This would all be at 20% as the 40%tax rate does not kick in until 32500. 32500 - 30686 = 1814 so that is the amount of bonus you could draw without breaching the 40% tax bracket. An adjustment is necessary if your wife agrees to transfer.

I do hope that you have found my reply of assistance.

Customer: replied 5 months ago.
Hello, and thank you. That’s exactly the sort of thing I was after. How did you get the £42186 figure. I can follow the rest (I think). Matt
Customer: replied 5 months ago.
Ha ha. I’ve figured it out. Silly me!!!

Allowing your 11% company pension contribution.

Please be so kind as to rate me before you leave the Just Answer site, Matt.

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