Tax Credits - Pension Contributions?

MsShorty

Exactly right. You need to wait until the renewal pack arrives, in order to renew your tax credits claim and finalise your 2010/11 claim.

I have been quite lucky in the past, in that my renewal pack has arrived towards the end of April, shortly before my employer provides me with my P60 and usually I have been able to renew at the beginning of May.

Then, it's just the 'fun' of trying to actually get through to HMRC on the phone. Luckily, the calls are included in my calling plan at certain times of day, so my finger will be on constant re-dial.

Although they tell you it can take up to 4 weeks, in my experience, they are usually pretty prompt at renewing your claim, once you have actually managed to get through to them.

spiderspeedster

Does this mean then if you increase your additional voluntary pension, then your tax credits will increase?
Could you effectively maximise your pension contributions and the shortfall in your p60 will be made up by the government?
If so then it could be a double dunt, because you pay your pension contibutions before tax ( If you contribute £100 per month, it costs you £75) so you win.

zagfles

spiderspeedster wrote: »

Does this mean then if you increase your additional voluntary pension, then your tax credits will increase?

Yes, if you're in the tapered band and not affected by the disregard from the previous year.

Could you effectively maximise your pension contributions and the shortfall in your p60 will be made up by the government?
If so then it could be a double dunt, because you pay your pension contibutions before tax ( If you contribute £100 per month, it costs you £75) so you win.

The shortfall won't be "made up". Your tax credits will increase by a maximum of 41p for every extra £1 (gross) or 80p net you put into the AVC. So each extra £1 AVC costs you 39p.

You used to be able to manipulate the disregard and get a "triple dunt" which would make the contribution almost free, you get the tax relief and 2 years of extra tax credits, but with the disregard being lowered and the introduction of a disregard for income increases next year I don't think this will work any more.