Over the last few tax years more and more people have moved into the 40% tax bracket – when they weren’t before. Literally hundreds of thousands of UK tax payers are paying tax at a higher rate because of changes in the tax brackets.
It basically means you need to earn less before you start paying tax at the higher threshold. Having to pay more income tax under PAYE is usually something no one wants to do, however one good thing is that you can claim tax relief on your job expenses at 40%, instead of 20%. This makes a big difference in the amount of income tax you can claim back, essentially doubling the size of any tax rebate your owed.
Example
We have clients who we help each year claim back expenses like mileage tax relief. Many of them are now paying tax at 40%, which they weren’t previously. If you are claiming for 10,000 business miles your claim will be worth £4500.
Paying tax at 20% you can claim a tax rebate of £900. Paying tax at 40%, you’re looking at a refund of £1800. It doesn’t matter what type of claim you are making, the additional tax relief applies. So, if you are claiming a uniform tax rebate or relief for using your own home, you can look forward to a higher refund than most. So don’t despair when you see the amount of tax taken in your pay packet, just make sure you only pay the you need to by claiming back what’s rightfully yours.
