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  • FIRST POST
    • Mustang G
    • By Mustang G 10th Sep 17, 11:37 AM
    • 12Posts
    • 0Thanks
    Mustang G
    Can tax rebates and relief add up to more than tax paid?
    • #1
    • 10th Sep 17, 11:37 AM
    Can tax rebates and relief add up to more than tax paid? 10th Sep 17 at 11:37 AM
    Hi

    I may be made redundant very soon and calculate I'll get a tax rebate if I don't get another job before the end of the tax year 17/18.
    I'm also thinking of selling a property and putting a lump sum into a pension - I will get basic tax pension relief and higher tax relief in a rebate. I won't be subject to capital gains tax as it was my main residency for many years.
    I also am able to claim back mileage Allowance relief.
    I'm calculating that this will all add up to more than I've paid in tax. Pretty sure my calculations are correct so just want to know if this is something that can happen?
    I'm hoping so and wonder if it's down to a fundamental difference between tax rebate (as having paid too much through PAYE) and tax relief (on pension contributions).

    Anyone have any experience or knowledge of this?
Page 1
    • Dazed and confused
    • By Dazed and confused 10th Sep 17, 11:55 AM
    • 1,705 Posts
    • 743 Thanks
    Dazed and confused
    • #2
    • 10th Sep 17, 11:55 AM
    • #2
    • 10th Sep 17, 11:55 AM
    There isn't really any special higher rate pension tax relief for personal pension or SIPP contributions, the pension payments simply increase the amount of 20% tax you can pay.

    Which in turn can save some people tax becuase it reduces the amount of 40% tax payable.

    The maximum refund is limited to the tax actually paid.

    Basic rate tax relief added to your pension by the pension company is completely separate to your own personal tax position.
    • Pennywise
    • By Pennywise 10th Sep 17, 11:57 AM
    • 9,111 Posts
    • 16,528 Thanks
    Pennywise
    • #3
    • 10th Sep 17, 11:57 AM
    • #3
    • 10th Sep 17, 11:57 AM
    Can you post some figures (doesn't have to be real nor too accurate) to highlight how you think the calculation will be to create the refund/rebate? Very difficult to advise without seeing numbers on paper. I.e. how big a pension lump sum were you thinking of? Capital gain won't come into it at all, if it was your main home, so leave that out.
    • Mustang G
    • By Mustang G 10th Sep 17, 12:35 PM
    • 12 Posts
    • 0 Thanks
    Mustang G
    • #4
    • 10th Sep 17, 12:35 PM
    • #4
    • 10th Sep 17, 12:35 PM
    Here's some figures to look at
    Annual salary - £75k
    Finish work 1st December - 9 months worked -
    Tax rebate here as I've been PAYE and expected payment per month has been /12 months rather than 9.
    Pay £45k net into pension (I know allowance is £40k but I'm carrying forward allowance from previous years)
    I think I'd get £12k basic tax relief added to my pension contributions and then I'd be able to claim £3k higher tax relief as a rebate on self assessment (45K net + £12k + 3k = £60k which is below what I'd earn and therefore I can pay in)
    Mileage Allowance Relief - calculated this with HMRC to equal £1,200 as a rebate
    • 00ec25
    • By 00ec25 10th Sep 17, 1:34 PM
    • 4,787 Posts
    • 4,158 Thanks
    00ec25
    • #5
    • 10th Sep 17, 1:34 PM
    • #5
    • 10th Sep 17, 1:34 PM
    you'll need to list the amount of the redundancy payment as well as the figures you have given so far
    • Mustang G
    • By Mustang G 10th Sep 17, 1:44 PM
    • 12 Posts
    • 0 Thanks
    Mustang G
    • #6
    • 10th Sep 17, 1:44 PM
    • #6
    • 10th Sep 17, 1:44 PM
    Just statutory redundancy
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