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Pensions/AVCs & tax credits
chatcat
Posts: 12 Forumite
in Cutting tax
I have just been told by those nice people at the "revenue" that I no longer qualify for child tax credit. I am a higher rate tax payer. I believe by paying pension contributions /avcs to reduce my gross income I may get back into these credits effectively giving me a greater incentive to put money into my pension. Any help or clarification would be appreciated
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Comments
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There is a thread in the pensions section a few months ago which shows how to get upto 77% tax relief on contributions.
http://forum.moneysavingexpert.com/cgi-bin/yabb/YaBB.cgi?board=Pensions;action=display;num=1089728456I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I read it and struggled to understand it, I think I am may be able to take advantage of this at it fits my profile, but not sure how to proceed.
Help Please0 -
Very basically, you income as used by tax credits is:
your gross income - gross pension contributions = income for tax credit purposes.
So, by paying into a pension, you reduce your income down which can bring you back into the salary range to get increase tax credits.
If you know how much you are over, then that is what you have to pay into the pension as a gross contribution.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0
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