Pension Contributions Tax Relief Limits

MikeJones_2

MikeJones wrote: »

If you earn £30,000 this tax year as salary (for ease of explanation as an example), you can contribute £30,000 [gross] into a registered pension scheme during this tax year. You don't have to deduct/allow for the personal allowances. There are limits as explained above (i.e. tax relief is available up to 100% of earned income limited to the Annual Allowance).

Obviously, I didn't make this clear enough then other than omitting the word 'gross' as inserted above! Just shows how one word...and I do this for a living!

Mike

riaplan

I started this thread, and I am grateful for all the contributions. It seems to me that persons who make their contributions thru their company payroll on a net pay arrangement (i.e. the amount of tax you pay is reduced immediately) are treated differently from persons who make their contributions on a relief at source basis i.e. the pension company claims back the 20% from HMRC for basic rate taxpayyers. Thus the PAYE calculator at
http://listentotaxman.com/ seems to me to model net pay arrangements - where you can clearly see the effect of varying both pension contribution amounts and the personal allowance on the tapering of tax relief to zero. I have written to my MP about this conumdrum who has forwarded to the relevant Treasury minister. It would be nice to have a clear written explanation/statement from HMRC that I can show the accountant.