tax credits and pension plan

banner188

Hi all. I was just wondering how tax credits regard pension contributions. I have a company based private pension which is deducted from my gross wage.

The tax credits people use my gross wage, but I have heard that if you tell them directly about the amount you pay towards pension, this can be deducted manually from your gross wages so that you get more tax credits?
Does anyone know if this is right?

Also, we had an overpayment last year and are paying it back now. Would a reduction in our gross income last year, due to pension, be used to offset this overpayment we had?

cheers

princessdon

Check your p60

If the pension is removed then this is figure you provide to TC

if it isn't removed (ie a private pension) you will need to do a SA and provide this, it;s easier if your p60

Is this a company scheme?

Icequeen99

Most occupational pensions are already taken into account on your P60 figure, so the figure that tax credits ask you for from the total taxable pay box of the P60 already has the pension deduction into account. In that case you are only paying tax on the figure after the contributions have been deducted, and that is the figure tax credits are based on.

If you pay into a private pension you can deduct the contributions from the P60 figure because they won't already have been taken into account.

The difference is explained here: http://www.hmrc.gov.uk/incometax/relief-pension.htm

For tax credits, see the TC825 form.

IQ

banner188

princessdon wrote: »

Check your p60

If the pension is removed then this is figure you provide to TC

if it isn't removed (ie a private pension) you will need to do a SA and provide this, it;s easier if your p60

Is this a company scheme?

This is a company scheme. It doesn't look like it is removed doing a quick calculation.

What is an SA, excuse my ignorance?

banner188

Actually, i think it may take into account pension contributions because I forgot to include the bonuses I have recieved through the year.