Working Tax Credits and paying into a pension...

gabby71

Hiya!

I am a single mum working full time, I get just under £40 per week in tax credits.
I started paying into a pension scheme through work earlier this year (paying £70 per month).
Will this be taken into account when I renew in April?

thanks

Gab.x

shedboy94

It won't I'm afraid, company pension contributions can't be deducted from the income you declare, only private pension contributions

MsShorty

That's not strictly true.

If your pension contributions are paid out before the deduction of tax and national insurance, then your P60 will show the amount earned during the year, minus any contributions to your pension.

So you would give them the amount stated on your P60, as the pension contributions would already have been deducted to get to this figure.

Hope this makes sense.

zagfles

Yes. The reason the notes tell you not to deduct employer pension contributions is because they are (usually) already deducted from your taxable pay. So when your P60 comes your contributions will already be deducted, so they don't want you deducting them twice!

There is an unusual method some employers use of deducting from net pay and paying into a stakeholder type pension, this is a complete PITA as you then can deduct the gross contribution but convincing TCO of it will be difficult. You can tell if it's this if you get pension statements showing they've claimed tax relief direct off HMRC, and if your taxable pay is not reduced by your pension contribution.

gabby71

hmm, ok thank you.x