Clarification on income tax rates and child care vouchers

Pythagorous

Hi everyone,

I begrudge paying 40% tax so I usually transfer anything above the upper tax limit into a personal pension every year. My income is from both a self employed partnership and also a full time job.

For 2010/11 this means anything above £43,875 will be taxed at 40%.

This year I have been paying in £243 from my PAYE salary towards child care vouchers every month.

My question is do I allow for the child care vouchers when calculating how much I need to put in to my personal pension to avoid the 40% rate?

For example say I earned a gross salary of £45K and paid £2500 in child care vouchers from this salary and also made £10,000 from my share of the partnership should I be paying in 45K+10K-£43,875 into the personal pension to avoid the 40% tax or does it only need to be 45K+10K-43,875-£2,500?

Appreciate any clarification.

Thanks