40% tax

sabelu

When does this kick in And if I start paying it in a tax year due to bonuses etc how do I get the pension benefit from hmrc retrospectively and does this get paid to my pension pot or to me

jem16

This tax year it's £42,475.

How you get it depends on type of pension. If it's a company pension and pension contributions are paid from gross salary, you get it right away as payments are made before tax.

If it's a personal pension, then 20% is added by the pension provider and you then contact HMRC to advise of gross payments and receive the other 20% directly to you.

sabelu

It's a company stakeholder but my earrings are 38k per annum basic but then I get a premium for shifts and a quarterly bonus result based @ about 1.8k so my salary tracks below the threshold until the last quarter how does this work?

jem16

sabelu wrote: »

It's a company stakeholder but my earrings are 38k per annum basic but then I get a premium for shifts and a quarterly bonus result based @ about 1.8k so my salary tracks below the threshold until the last quarter how does this work?

So are your pension payments made from gross or net salary?

It doesn't matter when you cross into higher rate tax, if you pay higher rate tax in one tax year then simply phone up HMRC at the beginning of the new tax year and advise them of your gross pension payment for the last tax year.

sabelu

Made from gross salary, is it my responsibility to advise hmrc once I go above threshold or do they action at this point

jem16

sabelu wrote: »

Made from gross salary, is it my responsibility to advise hmrc once I go above threshold or do they action at this point

If made from gross salary then there is no need for you to do anything at all as you have full tax relief at source.

Presumably if you look at your P60, your Taxable Pay is the amount of your Gross Salary minus pension contributions?

AirlieBird

sabelu wrote: »

It's a company stakeholder

sabelu wrote: »

Made from gross salary

If it's a stakeholder pension then contributions are unlikely to be made from gross pay.

sabelu

I pay 5% from my basic salary and my employer matches

jem16

sabelu wrote: »

I pay 5% from my basic salary and my employer matches

So did you check your P60 as I suggested? That would clear up the gross pay or net pay.