Salary Sacrifice when hitting Higher rate £50k

[tacka]

My employer has made me go inside IR35 bumped up my rate so my take home pay is the same as it was under Limited company and currently with an Umbrella.

I've decided to put £200 per week in Pension Sipp however I've calculated that it'd take 7-8 months that my salary will hit £50k

As a newbie will I be put on higher rate tax after the 8th month to 40%? the pension sipp at 8 months would be around £6200

Also what is the best method to avoid being hit the higher rate tax would it require more of a salary sacrifice or are there any other methods?

[northernladuk]

For a start they are NOT your employer. You need to get your terminology right. Some might say it's a pedantic point but if you don't understand what they are they it's going to lead to problems. Taking the time to understand what you are and who you work with/for should also have lead to you to understand the predicament you are in.

Going outide to inside means your contract was inside all along. You are potentially facing a retorpsective tax grab for all the tax you didn't pay while you were 'outside'. Bad idea to switch outside to inside. You are slam dunk caught and a very easy target for HMRC.

Contracting is your job. You need to understand this stuff.

So put more money in to the pension. It's the main way to avoid the tax. £200 is nothing so why so low?. You can put up to 40k in and save a ton of tax. You can also put 40k for previous years that you were in the scheme as well. If all you can put in is £200 then I'd say you've got a problem with your finances. If that's all you can afford what are you going to do when you are out of contract?

You need to speak to your Umbrella about what salary sacrifice options they have. They are your employer now. See what the art of the possible is and then come and ask about them.