{ "media_type": "text", "post_content": "I get tax brackets but in the UK making 30K you pay ~£6K tax and when you make around 5x more at £150k you pay 10x more tax ~£60k. What things can you do to lower your tax in consulting? (I’m not at 150 yet but most of us will get there hopefully if we stay in this role)", "post_id": "6173dd8da13a21002bee4866", "reply_count": 49, "vote_count": 10, "bowl_id": "58f81907c1ca28001625d527", "bowl_name": "Londoners in Consulting" }

I get tax brackets but in the UK making 30K you pay ~£6K tax and when you make around 5x more at £150k you pay 10x more tax ~£60k. What things can you do to lower your tax in consulting? (I’m not at 150 yet but most of us will get there hopefully if we stay in this role)

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Focus energy on boosting income (or capital gains). The UK doesn’t have the scope for personal tax optimisation of other regimes

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This.

Given all consulting salaries are paid as PAYE before Partner level, the short answer is no. Unless you are a contractor, then you can pay rated as a business and pay yourself as a dividend and reduce national insurance burden

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So do you have an idea of how they are taxed? Or you don’t know

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Pensions and ISA Allowance

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ISA's are wrappers to designed to shelter your investments or savings from CGT or Income tax. Most ISA's are as liquid as the underlying investment and the allowance works in one direction only i.e. if you put in £20k and take £20k out the next day, you can't put it back in till next tax year. Some ISAs are flexible but not too common.

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Most people will not get to 150 lol. This isn’t America and also not everyone is cut out to make director which is where you’d get that salary. Director isn’t a ‘years served’ kinda thing.

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Well you did suggest most people get there. They really don’t. To your point though, put it in pension, leverage all your workplace benefits (which are usually pre tax, such as being able to get a brand new car, a bicycle, insurance, etc. Also our corporation tax is favourable so become an independent contractor when you have the experience.

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Max your pension contributions. Will take your contribution share of 40k off your taxable salary. Look at your salary sacrifice options like ‘cycle to work’ or other salary sacrifice benefits.

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Not sure. About if leaving country. Possibly but you may be liable for tax on withdrawal. But not sure if you can. If you die your estate gets the pension

Its very weird that there is no rebate on rent paid unlike many countries, despite such high rents.

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And how do you pay for this?

You can have a look at EIS. But it s financially risky and fairly complex

Do some research but in a nutshell you get a % of your investment back as a rebate in your Annual Self Assessment. There's no way to reduce your income tax liability without investing it through a scheme like an EIS or into a SIPP.

What! If your salary is 150k, you only get 90k?

This post isn’t asking about the morality of high salaries or how to be content - it’s about how to minimise tax - appreciate that most comments here are actually relevant

It depends

On?

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