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  • FIRST POST
    • Hal17
    • By Hal17 7th Oct 17, 11:33 AM
    • 93Posts
    • 39Thanks
    Hal17
    Self employed Pension Contributions
    • #1
    • 7th Oct 17, 11:33 AM
    Self employed Pension Contributions 7th Oct 17 at 11:33 AM
    Hello, I wonder if anyone can help with the following please?

    I am currently taking a sum from my pension that is just below my personal allowance, so currently pay no income tax. I am using capped drawdown so could add up to £40K to my pension under the current tax rules.

    I may have the opportunity for some self employed work and was wondering if I say earned £10K, could I put this into my pension and claim the 20% on this full amount?

    I would stop my pension income and therefore would still not pay any income tax. I currently pay in the £2880 per year and get the tax relief. But everything I am reading says you have to be a tax payer to get tax relief above the £2880 contribution. Appreciate any help.
Page 1
    • xylophone
    • By xylophone 7th Oct 17, 12:08 PM
    • 23,646 Posts
    • 13,777 Thanks
    xylophone
    • #2
    • 7th Oct 17, 12:08 PM
    • #2
    • 7th Oct 17, 12:08 PM
    Re "relevant earnings".

    http://www.pruadviser.co.uk/content/knowledge/technical-centre/tax_relief_members_contributions/
    • xylophone
    • By xylophone 7th Oct 17, 12:23 PM
    • 23,646 Posts
    • 13,777 Thanks
    xylophone
    • #3
    • 7th Oct 17, 12:23 PM
    • #3
    • 7th Oct 17, 12:23 PM
    Re capped drawdown and MPAA

    http://www.pruadviser.co.uk/content/knowledge/technical-centre/money_purchase_annual_allowance_mpaa/

    But everything I am reading says you have to be a tax payer to get tax relief above the £2880 contribution.
    Not so.

    Suppose a person's only income this tax year will be his salary of £950 a month from a part time job.

    His earnings would be within the PA of £11,500 and he would not be paying income tax.

    Nevertheless, he could pay up to £9,120 this tax year into a personal pension (relief at source) and receive tax relief of up to £2,280.
    • Hal17
    • By Hal17 7th Oct 17, 2:40 PM
    • 93 Posts
    • 39 Thanks
    Hal17
    • #4
    • 7th Oct 17, 2:40 PM
    • #4
    • 7th Oct 17, 2:40 PM
    Thanks Xylophone, I really appreciate your help. I was getting confused so your explanation was excellent. Thanks again.
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