15:39 27 March 2013
You may be thinking that you will have that personal allowance to back you up, no matter how much you earn. If you make less than £100,000 you are probably right. However, if you make even a pound over this amount your personal allowance starts decreasing which means a heavier tax burden.
Plan now to prepare your tax returns. The HM Revenue rates let you use your personal allowance only until you reach the £100,000 limit. Once you earn that much money they start reducing your allowance at a rate of 1per cent to 2per cent.
This means that they take out £1 for every £2 you earn over the allowance. This will make your allowance unavailable once you reach £116,210 for individuals.
There are a few ways to combat this situation and reduce your tax burden:
Are you self-employed and want assistance while working a second position?
Thus, planned personal tax returns could save you from incurring extra tax burden which could take money that would be of much greater use to you and your family.
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