Scottish income tax trap, any tips ?
Discussion
Had a look around the forums but didn't come across anything relevant.
With the Scottish income tax now having more tiers than Nicola Sturgeon during a Covid enquiry, this is becoming frustrating to say the least for "higher earners" note the inverted commas !
The obvious and simplest route is to reduce your taxable income by increasing pension contributions. Other than this, are there any other angles to be played here ?
With the Scottish income tax now having more tiers than Nicola Sturgeon during a Covid enquiry, this is becoming frustrating to say the least for "higher earners" note the inverted commas !
The obvious and simplest route is to reduce your taxable income by increasing pension contributions. Other than this, are there any other angles to be played here ?
sherman said:
The Scottish Inddpendence thread has a few people who seem to understand it a bit more.
.https://www.pistonheads.com/gassing/topic.asp?h=0&f=&t=2061696&d=16114.62859#seperator
Thanks, just had a quick read through it. I was expecting blue and white face painting with everyone shouting freedom but it's actually the opposite from what I have read so far !.https://www.pistonheads.com/gassing/topic.asp?h=0&f=&t=2061696&d=16114.62859#seperator
CSK423 said:
Had a look around the forums but didn't come across anything relevant.
With the Scottish income tax now having more tiers than Nicola Sturgeon during a Covid enquiry, this is becoming frustrating to say the least for "higher earners" note the inverted commas !
The obvious and simplest route is to reduce your taxable income by increasing pension contributions. Other than this, are there any other angles to be played here ?
Nothing I can think of. I'm a higher rate taxpayer in Scotland and every time the SNP increase income tax I put more into my pension. The real kicker is the marginal rate between approx. £43,600 and £50,271 where you will pay 42% income tax + 10% NI for a total of 52%. In other words the Government takes more than half your salary in this band and a lot of 'normal' jobs fall in this range. With the Scottish income tax now having more tiers than Nicola Sturgeon during a Covid enquiry, this is becoming frustrating to say the least for "higher earners" note the inverted commas !
The obvious and simplest route is to reduce your taxable income by increasing pension contributions. Other than this, are there any other angles to be played here ?
CSK423 said:
The obvious and simplest route is to reduce your taxable income by increasing pension contributions. Other than this, are there any other angles to be played here ?
Sadly not much. Vote for the non SNP candidate most likely to win next election obviously. I do the pension contribution and also cut my hours slightly. I,d rather have the time to myself than pay 42% tax and 10%NI. While earning under £50k
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GA extends the basic rate band so more of your income is taxed at the basic rate and less of it is taxed at the higher rate(s).
You can win on three taxes here as the impact can be seen on (earned) income tax, dividend income tax, and capital gains tax…
But as much as you might ‘win’, you won’t really be increasing your net after tax (relief) income, but it could end up costing you pennies in the £ to support the charities that you might choose to.
GA extends the basic rate band so more of your income is taxed at the basic rate and less of it is taxed at the higher rate(s).
You can win on three taxes here as the impact can be seen on (earned) income tax, dividend income tax, and capital gains tax…
But as much as you might ‘win’, you won’t really be increasing your net after tax (relief) income, but it could end up costing you pennies in the £ to support the charities that you might choose to.
I think he’s being sarcastic. The value of free prescriptions to most isn’t great and the SNP’s underfunding of higher education means there’s entire courses at some Universities, Edinburgh being a notable one, that are barred to anyone from Scotland who isn’t in a Widening Participation target group. I’ve pretty much accepted that I’ll be sending my own kids to English universities and paying the accommodation costs. When I went through University my parents had to pay fees, but I was able to commute, along with the majority of the course, which saved a fortune.
To the OP, don’t live in Scotland basically, it’s turned into a tribal s
t hole under these imbeciles.
To the OP, don’t live in Scotland basically, it’s turned into a tribal s
t hole under these imbeciles. Edible Roadkill said:
Short of getting an address south of the border to use as your primary residence.
You can lower your income through:
Pension
Electric vehicle via salary sacrifice
Cycle to work scheme
I got a e-bike that is gathering dust in the garage.You can lower your income through:
Pension
Electric vehicle via salary sacrifice
Cycle to work scheme
I have ordered a SS electric car, despite WFH and doing very little milage (the net cost to me was slightly higher than the s hit box I have at the moment).
Pension is well funded....
I've taken advantage of extended medical cover, dental cover, more charitable giving and still adding to pension to keep me out of the punitive band.
The 52% marginal tax rate (income tax + NI) between £43-£50k really is shocking and as stated above that salary in 2024 covers a lot of ‘normal’ jobs, not what you would describe as high earners.
I’m surprised more stink isn’t kicked up in the press about this. Unfortunately I think the problem is most don’t understand the tax system and don’t know they are getting absolutely shafted by the SNP abusing its powers.
As stated above, best solution is pension contributions, things like salary sacrifice cars or bikes are also useful as long as you actually need a car (it’ll still net cost you money each month).
One thing I wonder - and it’s probably unlikely given the hardcore nationalist voter base - but if we see a big shift from SNP to labour in Scotland and labour held the power (probably as a minority government) would they use their power to realign taxes with the rest of the UK or would they continue to keep higher rates? My feeling is the latter and therefore we’re basically facing being screwed up here permanently.
I’m surprised more stink isn’t kicked up in the press about this. Unfortunately I think the problem is most don’t understand the tax system and don’t know they are getting absolutely shafted by the SNP abusing its powers.
As stated above, best solution is pension contributions, things like salary sacrifice cars or bikes are also useful as long as you actually need a car (it’ll still net cost you money each month).
One thing I wonder - and it’s probably unlikely given the hardcore nationalist voter base - but if we see a big shift from SNP to labour in Scotland and labour held the power (probably as a minority government) would they use their power to realign taxes with the rest of the UK or would they continue to keep higher rates? My feeling is the latter and therefore we’re basically facing being screwed up here permanently.
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