How best can I protect myself from the ridiculous level of tax here in UK? Fresh out of uni and student loan repayments, NI hike and falling into the additional tax bracket is a lot to deal with… I hear ISAs get discussed as a solution but is there anything else out there? Thanks
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Unfortunately not much. ISA gives you £20k to play with tax free p.a. Capital gain allowance p.a. is c.£12k so you can trade sto(n)cks and pay no tax on the gain.
Contribution to a private pension plan is also a possibility: unless you earn >c.£330k your contributions are topped up by gvt at your upper tax rate bracket (is you contribute 55 and you get 100). A pension fund advisor will do the calcs for you. Of course you won’t see this cash until at least 55yo (for now).
Ah so it is pretty limited like I thought :/
Thanks for your help!
As the other poster said, relatively limited options as a PAYE employee unfortunately. Pension/salary sacrifice is by far the best way of minimising taxes, the big downside as the other poster said is you won’t be able to access any of the money until you’re at least 55.
I would say definitely open up a savings/stocks & shares ISA. You can put £20k in pa, also more importantly any subsequent gains are ringfenced/excluded from taxation. So if you’d had £40k in your shares isa and invested it in the S&P500 in March 2020, today you would have close to £80k ie. £40k profit completely tax free/protected from capital gains.
Appreciate the tips, will look into those tomorrow!
do you open this up with your Bank so e.g. Barclays or Halifax etc or set this up independently?
I’m pretty confident you have to go out and look yourself
One of the reasons to have your own company. I had one when I lived in the UK.
Can you elaborate on this? Can you have your own company and be paid through it instead of being an employee at the firm you work for? I’m not sure if employers are down with doing that but I would love to do that if possible obviously.
I had to set up my own company during the days of IR35. I did a deal with my employer to be a independent company. My accountant was instrumental in helping me set this up. So, I took my pay as a form of shares/stock at the time. Did this for a few years before moving to USA.
Ok I see, yeah I don't think my employer would be down for this. I'm not a key employee and they wouldn't even give me comp in USD even though the firm makes it's money in USD.
You could not get paid in dollars because you are not living in the states plus, it costs the company more. Some companies do do it but you have to be a special executive for that. Some one that makes a huge amount of $$$ for the company.
Wrong. IBs (US or CH, from VP up) pay bonus in USD or GBP, your choice.
Setting up a company doesn’t work for most employers (certainly not for large ones).
What part of being an executive is wrong?
What's the effective rate there for IB associates?
Just pay your taxes man, the UK needs money to pay for their millions of 3rd world migrants...
Lool
Would be better if the money went there instead of subsidising lobster and wine for MPs
Nah, I would never want to subsidize increased crime and demographic change.
Lol, the tax burden in the UK was so heavy when I lived there, no matter what party is in power. National insurance, PAYE, VAT, the list goes on and on.
Ye it sucks, but it's still way better than Germany, Sweden and other continental countries.
Considering how 3rd world migrants are more likely to be employed and way more hard-working than the typical brit. I think you're totally inaccurate here.
Yeah, but they work as Deliveroo drivers lol
just be thankful that you aint paying for private healthcare
and invest in EIS funds... write off the 9 out of 10 losses over the investment life... take the gains from the inevitable ten bagger
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