I've been doing some extra work (in my current job, not for a seperate company) for which I will be paid £2,350 on top of my regular salary. It is proposed, as I understand it, that in whichever month it is paid to me, the £2,350 will simply be added on top of my regular monthly salary and run through the usual PAYE system.
Now, i've calculated that I will lose a massive £925 (!) of the £2,350 in tax. This to me is unnacceptable. I'm assuming this is because, for the month that I get paid the extra money, it puts me in a higher tax bracket. But i'm not entirely sure. What are the salary thresholds for tax these days?
How can I minimise the amount of tax I pay on the extra payment? Would splitting the extra payment across two or three months help keep the tax down? Or, I don't know, anything else?
A good case study for any budding accountants I think.
Something about £55k.
Thanks in advance.