Pension / Tax Calculations

Dazed_and_confused

Thanks for this. I will read through this in detail later this afternoon.

I don't think that is going to help in your circumstances. As you don't have a PAYE source of income where a tax code can be applied I think you will have to wait until you complete your Self Assessment return.

If for no other reason than until then it will be impossible to know what additional relief is actually due.

Thorsson

Dazed_and_confused wrote: »

I think you'll find a lot of people posting on this board are doing just that.

Plenty get £720 tax relief when paying no tax and it's not beyond the realms of possibility to contribute £10k and receive £2.5k in tax relief (2019:20 tax year values).

Yes, you're right. It will depend on the individual's circumstances.

zagfles

Thorsson wrote: »

This is a redundancy payment, therefore should not be taxed up to £30k. I don't see how you can get tax relief when you haven't paid any tax, so I would have thought that pension tax relief is restricted to £10k.

What makes you think the OP's redundancy is only £40k?? It sounds like it'll be much higher than that as he/she expects taxable income to be over £90k and is only working the first month of the new tax year.

tigerspill

Thorsson wrote: »

This is a redundancy payment, therefore should not be taxed up to £30k. I don't see how you can get tax relief when you haven't paid any tax, so I would have thought that pension tax relief is restricted to £10k.

The pension contribution will be from the payment over and above the 30K tax free element - which will taxable.

tigerspill

zagfles wrote: »

What makes you think the OP's redundancy is only £40k?? It sounds like it'll be much higher than that as he/she expects taxable income to be over £90k and is only working the first month of the new tax year.

Exactly this - it is a very significant payment. Taking the 30K tax free amount out, it will still be just over 90K. And I am trying to minimise the tax to pay and pension is the obvious first (and maybe only) step for me. I will still end up paying some at HRT.