The starting point
Tax planning is all about forecasting where your income is likely to end up for a given tax year and what your marginal income tax rate is.
For the tax year 2017-18, everyone has a tax-free personal allowance worth £11,500. The next £33,500 of income is generally taxed at 20 per cent (basic rate taxpayers), which means it is not until income exceeds £45,000 (higher rate taxpayers) that the40 per cent rate starts to kick in.
After that it starts to get exciting. For working families, with children eligible for Child Benefit, the payment gets withdrawn by 1 per cent for each £100 of income above £50,000. Therefore, by the time income reaches £60,000, eligibility for any Child Benefit is lost. If it has been paid, it must be repaid, typically by the higher earning partner registering for self-assessment if they are not already in the scheme. Married couples and civil partners may be able to arrange their affairs so that income is equalised between them. Doing so might bring their incomes each below £50,000, thus preserving Child Benefit in full for some. This may not be possible if they are working in paid employment, but if they have self-employed income including from their own company, or rental income, the profits can be shared in different proportions between them.