3 tax-year end tips to share with high-earning employees
Hands up who has regular ‘why didn’t someone tell me that?’ moments? I certainly do. Here are my most annoying top three:
1) World Party cancelled at The Phoenix Festival in the 1990s
Not keen on World Party, I killed time waiting for my favourite band (The Manic Street Preachers), watching the awesome Rico* in a side tent. Dashing back, I saw The Manic Street Preachers play their final chord and say ‘thanks - you've been a great audience’.
Confused, I asked some random what had happened: ‘World Party cancelled, so the Manics came on early; they were brilliant!’ Gutted. Why didn't my mates text me? Oh yes, mobile phones weighed a ton in those days, weren’t widely owned and there were only four masts in Britain.
*Ex The Specials ‘Bap ba bap ba bap baaaaa - a message to you, Rudie’
I recently parked my wife's Mini in a car park with ANPR (Automated Number Plate Recognition). I didn't know we had registered our car for automatic payment in all ANPR car parks in the Wycombe & District area.
It’s annoying having to pay to park at the best of times, so guess how miffed I was when I paid in cash there and then, only to realise a week later that I had also paid online.
3) Flying low
Being in my 50s, I know I should have got the hang of it by now. But dashing about, sometimes things do get missed. So why didn't anyone on the Bakerloo Line tell me; ‘Oi mate, you're flying low’? Would have been nice.
In the workplace, as the end of the tax year looms, here are three things your higher-earning employees need to get right and would rightly be annoyed about if nobody told them:
1) Maximise pension contributions
This is especially important if you are carrying forward unused pension relief. There are only a few days left to fully utilise the £50,000 annual allowance of 2013/2014. And mind that Pension Input Period (PIP)!
2) Why not make a personal contribution?
This may get tax relief of 60%, if your income is between £100,000 and £122,000, and you would otherwise gradually lose your personal allowance. It may also drop your perceived salary below £110,000 and pass the threshold allowance test, to avoid tapered allowance issues.
3) Please watch that MPAA
The Money Purchase Annual Allowance is the amount that can be contributed to a pension each year once someone has started taking their savings from defined contribution arrangements. It was £10,000, but drops to £4,000 in April 2017.
This may catch a few people unawares, especially those who have planned or even started semi-retirement. Employers may have to consider cash alternatives to pension contributions.
James Biggs is head of financial wellbeing at Lorica.
This article was provided by Lorica.
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