This means that you can earn £46,350 in the tax year ending 5 April 2019, whilst remaining a basic rate taxpayer, with this threshold rising to £50,000 for the year ending 5 April 2020. The £100,000 threshold remains in place with the personal allowance tapering away by £1 for every £2 over the £100,000.
Steps should be taken to reduce or eliminate taxable income between £100,000 and £123,700 for the year ending 5 April 2019 (£100,000 and £125,000 for the year ending 5 April 2020) as an effective hybrid rate of tax of up to 60% will be paid on income falling between these amounts as a result of the personal allowance restriction. It is therefore possible, in the right circumstance, to secure 60% income tax relief by making pension contributions or charitable donations.
Taxable income and tax liabilities can be reduced by a number of means such as:
