UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Please verify what you mean by 'Childcare Vouchers' and are they GBP 124 a week of a year?
Your income is 112.2K + 20K = 132.2K less 5% pension contribution 6.6K = 125.6K less 1.488 sacrifice leaves say 124K liable to tax. You loose your personal allowance at a pound for every two quid over 100K so you have no personal allowance. You could increase your pension contribution to up to 40K (the 15/16 limit) so a 13.2K contribution would reduce your income to say 112.5K and you would still loose half your personal allowance. You tax bill could be 31785 @ 20%, 6357 and the balance @ 40%, 38286, total 34643. Take that from 112500 leaves say 6488 GBP a month available, so your proposals are feasible.
Yes, they say you have to earn it to pay tax on it, but there comes a point, unless you are a Russian Oligarch or Donald Trump, when there doesn't seem much mileage in earning more! However, those of us who remember Dennis Healy and his 95% tax rates on unearned income, find the taxation climate quite mild these days. Always bear in mind Benjamin Franklin's dictum that in life there are but two certainties, death and taxes!