things deductable re tax credits

imogen-p

Having read through some of the thread here some people are mentioning that some types of pension contributions are deductable when working out income for tax credits.

I pay in to a pension scheme (local authority if that makes any difference), about £60 pcm, does this mean that income I should use for working out my tax credits should be my pay minus the £60? So £720 per year less than the pay I've told them?

kerryallc71

http://www.hmrc.gov.uk/forms/tc825.pdf

use this link it tells you about pension contributions , this link will tell you more about it .

hope it helps ..

imogen-p

Thank you. It does look like I should have deducted my pension contributions from my pay.

sarflee

Be careful. Are the pension contributions taken from your wages? If so it is quite possible that they have been taken from your gross income before tax is deducted. The figure that is shown on your P60 and used for tax credits, is the taxable income, not gross income and therefore the pension deductions may already have been accounted for.

imogen-p

I'll have to double check that. But I know that the figure that I've been giving them uptil now is the gross figure before anything has been deducted including the pension contributions.

Figures as they stand are:

Gross annual pay before anything has been deducted = £13646 (£1137 pcm)

My payslip then shows (month) gross monthly pay of £1137 in column 1, then in deductions in column 2 pension contribution, tax and NI deductions. And then in column 3 my take home pay.

I've currently been giving tax credits the figure of £13,646. The question is whether this is the right figure or or not.

sarflee

There should be figures on your wages slip that show Gross pay to date and Taxable pay to date. If these are the same I would say you need to deduct the pension payments from the figure you provide tax credits. If the taxable pay to date is lower, I would say the pension payments are already deducted.

It is the norm, even if your pay is taxed after pension contributions, that all deductions are shown in the same column and it is the taxable pay that you need to provide to tax credits.

imogen-p

Pay slip just says pay to date, tax paid, NI paid and pension contributions paid.

The pay to date, being as this is month one of the financial year is £1137, or 1/12 of annual gross pay. So they don't seem to be listing my taxable pay on the slip.

zagfles

This sounds very odd. A local authority scheme should be getting this right, your pay to date should be taxable pay (ie minus pension payments) otherwise they won't get your tax right.

Is your pension a salary sacrifice type pension, in which case the pension might already be deducted from your monthly gross pay and be presented in the deductions just for info?

What is your taxcode? How much tax & NI did they take off? What was the pension deduction? If you post all the numbers on your payslip inc year to date totals I'll try to work it out...

kerryallc71

not sure if this link will help ..

http://www.litrg.org.uk/low-income-workers/tax-credits/tax-credits-advisers/what-is-income ..

kerryallc71

Personal pension contributions you paid into a registered scheme. Include Free-Standing Additional Voluntary Contributions
and payments to Stakeholder pensions. Enter the gross amount. Don't include contributions you paid through your employer.

this is what it says in the TC600 notes ..

http://www.hmrc.gov.uk/forms/tc600-notes.pdf


my husband pays into a stakeholder pension ..

- wage figure
- tax deducted
- national insurance deducted
my husbands stakeholder pension contributions are deducted from his net pay .. not his gross pay . his p60 does not show any pension contributions ( legal & general ) stakeholder pension scheme , he gets a yearly statement from legal & general to say what he has paid etc ..

ive looked at his stakeholder pension policy and that says his pension contributions are paid from his net pay ( after tax & national insurance deductions ) not his gross pay .. he gets tax relief in his pension scheme not his monthly wage , his tax code is 747l .

MsShorty

I also pay into a LGPS (local government pension scheme). The amount shown on your P60 is the amount that should be given to tax credits, as the figure shown on your P60 is your pay AFTER pension contributions have been taken off.

Likewise, your pay slips should show your gross pay, tax paid, NI paid and Pension contributions. The figure you should be giving to tax credits is your gross pay MINUS any pension contributions made.