Childcare vouchers effect on DB pension with extra SIPP complication

bigadaj

RickyB2000 wrote: »

I guess you have to get them to adjust your code at the start of the year based on expected SIPP contributions rather than leave it until the end of the tax year and claim back the cheque. I wonder what happens if you then don't pay what you said into a SIPP, guess you have to repay the NI and tax.....

Yes, you don't get NI relief though, only tax relief.

RickyB2000

bigadaj wrote: »

Yes, you don't get NI relief though, only tax relief.

Not on the SIPP contributions. But I did on the childcare vouchers - and if my income ended up over 40% rate because I didn't pay in as much as I said I would (or I had some other income that pushed me over the 40% my employs didn't know about) wouldn't I have to repay the NI on the vouchers (and my employer would need to pay their NI)? The whole thing feels very complicated...

rpc

RickyB2000 wrote: »

A related question. A 20% tax payer is allowed £240 a month in childcare vouchers before tax. A 40% payer is only allowed £120 a month before tax. If you reduce your income below the 40% rate via personal post-tax contributions to a SIPP, would you be able to get £240? If so, how would you go about getting this from your employer (who will see your pay as being taxed at 40%)? Or can you claim from the tax man?

SIPP is irrelevant, although there can be an impact if you get an amended tax code.

It is not a proper calculation of your tax status that affects your childcare vouchers benefit. It is a "basic earnings assessment" and you need to familiarise yourself with it. This is done at the start of the tax year and is effectively binding even if it is wrong. It will inevitably be wrong, although hopefully not by much.

SIPP is not included, occupational pension are including AVCs. OT is not normally included, unless it is guaranteed.

Go have a read: https://www.gov.uk/government/publications/employer-supported-childcare

RickyB2000

rpc wrote: »

SIPP is irrelevant, although there can be an impact if you get an amended tax code.

It is not a proper calculation of your tax status that affects your childcare vouchers benefit. It is a "basic earnings assessment" and you need to familiarise yourself with it. This is done at the start of the tax year and is effectively binding even if it is wrong. It will inevitably be wrong, although hopefully not by much.

SIPP is not included, occupational pension are including AVCs. OT is not normally included, unless it is guaranteed.

Go have a read: https://www.gov.uk/government/publications/employer-supported-childcare

Lovely, thanks for the link!