Pensions/AVCs & tax credits

chatcat

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

dunstonh

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=1089728456

cp

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 Please

dunstonh

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.