Advice please

MalcRH12

Hi all.

My total earnings this tax year totals £54700. I would like to avoid the 40% tax bracket if possible and avoid paying back nearly half of the child benefit we have received this year! Could I contribute to a personal pension to avoid 40% tax (even though the tax has already been paid) and also avoid paying back child benefit? If so, how much would I need to contribute to a personal pension to do both of these things for this tax year 18/19? Thanks in advance.

Linton

If a higher rate tax payer wants to contribute say £10K into a personal pension they actually pay in 80% of £10K=£8K. HMRC return the £2K basic rate tax to the pension and the further £2K higher rate tax as cash outside the pension.



So if you know how far into the higher rate band you will be this tax year you would need to contribute 80% of that from your already taxed money into a private pension.