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<blockquote data-quote="Highland Mule" data-source="post: 8640055" data-attributes="member: 33090"><p>Marginal rate, but yes. The £1M isn't difficult to reach, and they can't opt out of paying into the pension fund so they get taxed on the way in and then out again at a very disproportionate rate. I'm not sure of the exact percentage but my tax advisor was clear that it wasn't worth their while once they knew they were on track to hit the ceiling.</p><p></p><p>Same thing applies to many of these graded scales - whilst the overall rate might not look too bad, the marginal rate can be. I remember my mother refusing a pay rise back in the days because she was going to be worse off with than without (presumably would have put her over an NI threshold or something).</p></blockquote><p></p>
[QUOTE="Highland Mule, post: 8640055, member: 33090"] Marginal rate, but yes. The £1M isn't difficult to reach, and they can't opt out of paying into the pension fund so they get taxed on the way in and then out again at a very disproportionate rate. I'm not sure of the exact percentage but my tax advisor was clear that it wasn't worth their while once they knew they were on track to hit the ceiling. Same thing applies to many of these graded scales - whilst the overall rate might not look too bad, the marginal rate can be. I remember my mother refusing a pay rise back in the days because she was going to be worse off with than without (presumably would have put her over an NI threshold or something). [/QUOTE]
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