Don’t lose your 2020/21 personal allowance
For every £2 that your adjusted net income exceeds £100,000 the £12,500 personal allowance is reduced by £1. Pension contributions and Gift Aid can help to reduce adjusted net income and save tax at an effective rate of 60%.
The restriction applies between £100,000 and £125,000 adjusted net income. Another way that you could steer clear of this trap would be to agree with your employer to sacrifice some of your salary in exchange for a tax-free benefit in kind such as an additional pension contribution.
For further information on the 2020/21 personal allowance, please contact Matthew Magee on 023 8046 1207.