Tax and pension.

matthew74

Hi all.

My wife is employed and self employed. Her employment salary is just below the threshold for higher rate tax and so the pension payments she makes (deducted at source on payslip) only net her a tax saving of 20%.

Her self employed additional income take her well above the threshold for higher tax rate.

Anyone know if and how we can claim further tax relief up to 40% on the pension deductions. I have looked through the self assessment and can fine no obvious way to do it.

Any ideas???

TIA

CLAPTON

the way it will work is that your wife's employed earning will be treated as net of pension contributions so she will then pay less 40% on the self employed earnings

robpitt

The key question is:
is the contribution deduction before or after tax.

If 'before', nothing to claim.
If 'after' then yes you can claim via self assesment.

Terminology often gets muddled and not all employers deduct before tax so it's worth checking if unsure.

matthew74

Thanks for the replies.

Looking at my wife's payslips, her pension contribution is 3%. On the payslip this shows up as 2.4% coming off her salary after tax is deducted (the company pay the basic rate tax relief of the extra 0.6% 'behind the scenes').

Hence am I right that I should be able to claim back some tax (the extra 20% tax relief of a higher tax payer) through self assessment?