Options to lower tax/Total gross income - Salary sacrifice?

Coume

Hello,

I am in sales and earn a decent salary (basic + quarterly commissions).

Currently my total gross income is made of the above plus my medical insurance, which is a taxable benefit.

I am likely to loose my entire tax allowance this year so I am wondering what ways are available.

If I wanted to top up my pensions, I am better doing a lump sum or would there be additional benefit in asking my company to do so through a salary sacrifice?

I.e.: If I was to make a 5/10k salary sacrifice, does that mean that my totall income will not show this amount or would it still be included in my P60?

Thanks

Amoore

Hi

I'm in a similar situation, looking to lower my tax as i've just changed jobs and had a salary increase and car allowance.

I earn £43000 PA plus i get a £400 PM car allowance (£4800 PA).
I put in 5% to my pension at the moment which totals £2150 which can be deducted before tax is calculated.

Currently my Tax code is 633T (as i'm back paying some tax for a company car from a previous job i left last month).
Come April or so it should revert back to 1100L so for the basis of this I'll work on the standard 11000 tax free allowance which can be deducted from your annual salary.

So my salary ((43000 - 2150) + 4800) - 11000 takes me a good amount into the 40% bracket.

The best way I know for my situation to lower my tax is to up my pension contributions to about 14 or 15%........ If my calculations are correct

I'm sure there are some much smarter people out there on this subject than me so i'm happy to stand corrected

Dazed_and_confused

Amoore,

Only a minor point but I think this looks a lot more complicated that it actually is.

In the HMRC world they will just see, using your figures, a "salary" of £45650.

Company pension contributions such as those you seem to be making reduce the amount of taxable pay and car allowance is actually just extra pay (albeit not pay which attracts any pension benefit looking at your figures) so when you get your P60 all HMRC will see is the overall taxable pay amount

bengalknights

The best way would be to contribute into a pension

redpete

Coume wrote: »

If I wanted to top up my pensions, I am better doing a lump sum or would there be additional benefit in asking my company to do so through a salary sacrifice

Benefit of doing this via monthly contributions from salary is that tax relief is seen immediately and not dependent on you making claim to hmrc for higher rate relief. On top of this salary sacrifice will save you ni payments.