11/08/2025
Here’s what it really means and how smart planning (With Smart Accountants 😉) can help you keep more of your hard-earned money 💷
The 40% Tax Bracket Explained 👇🏼
🔹You pay 40% income tax on earnings over £50,270 (for 2025/26).
🔹The first £12,570 is tax-free (your personal allowance).
🔹£12,571–£50,270 is taxed at 20% (basic rate).
🔹Anything above £50,270 falls into the 40% bracket (higher rate).
What can you do about it?
1️⃣ Pension contributions – Reduce taxable income while saving for the future.
2️⃣ Claim all allowable expenses – Don’t pay tax you don’t owe.
3️⃣ Consider switching to a Limited Company
Switching to a limited company could help you:
🔹Reduce your overall tax liability
🔹Retain more of your hard-earned profits
🔹Access additional tax planning opportunities
The higher your income, the bigger the potential saving 💰
Not sure if going limited is right for you?
Let us crunch the numbers and help you decide the best structure for your business going forward.
📞 0121 285 0482
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