Unused Income Tax Allowances

Pointers

Good Morning All,

I have been researching possible salary sacrifice to try and reduce my tax bill but have now got a bit stuck and would really appreciate some answers to my questions and/or advice.

I have recently had a pay rise and my new salary is £k per year. I am in a fortunate position in that I don't need a lot of this to live and would like to put it into my pension for future years rather than pay a lot of it in tax. I am single and have no children or other dependents. I am currently renting a property but hope to buy somewhere in 2020 and have a deposit saved up so that I won't necessarily need to show a large salary in order to secure a mortgage.

I have paid the following amounts in tax in recent years.

2014 £12,323.00
2015 £62,675.00
2016 £46,262.00
2017 £41,174.00
£162,434.00

My understanding is that the allowance to be put into my pension tax free is £40k per annum and any previously unused allowances can be carried forward for up to 4 years? Depending on when I start doing this I think I can use the allowances for 2015, 2016 & 2017 but probably not 2014. If the allowance is £40k and I have 4 years unused allowances to carry forward then I should have £160k available.

Does this mean that I can use this to not pay tax on the first £160k that I am paid during the tax year 2019/2020? Presumably my allowance will start again on in April for the next year so potential I could put £200k into my pension tax free?

Is it too late in this tax year to start salary sacrifice to reduce my tax bill?

I understand that the process would involve me notifying my employer that I want to take this salary sacrifice and lowering my salary accordingly. but I/they couldn't legally lower it below the national minimum wage. As I have savings I could like on this national minimum wage without any issues.

This salary sacrifice seems beneficial as the money will go into my pension rather than being paid in tax. At the beginning of financial year 2020/21 I presumably could then reduce the salary sacrifice to just the £40k (having used up the carried forward allowances) and then my salary would be higher and so if borrowing for a mortgage I could borrow based on my salary minus this £40k?

Or I could get the mortgage and then set up the salary sacrifice afterwards? The bank would lend against my salary but if I had put in a big deposit they would have plenty of equity and as long as i'm making the monthly repayments and had savings should I lose my job and needed to keep paying I think this would work fine.

I already put 15% into my mortgage (9% from myself/6% from my employer) and so can't do any more there.

I currently have a relatively highly paid job but this likely won't continue beyond the next 3-4 years and so I would like to put as much money into my pension as possible rather than paying lots in tax. I'm 40 currently and so this would then be available when I retire.

Does this seem like a sensible approach? Is there anything else that I'm missing?

Thanks in advance

p00hsticks

This is probably best off moved to either the 'Cutting Tax' or 'Pensions' board as it doesn't relate to benefits.....