Salary Sacrifice Pension and Self Assessment

Scottish_Banana

HI Everyone, long time lurker here - I've had a look for a similar post but can't find anything either here or on the Pensions board.
So, my situation - I am employed as a nurse, and have a salary sacrifice pension arrangement with my employer (not NHS, I work in a Hospice). I don't have any other personal pensions. I am also a partner in my husband's business and registered as self-employed for this (I do his admin, accounts etc), so I also submit a tax return for self assessment. A combination of salary and business profits this year (2018/19) will take me into the higher rate tax bracket.
In previous years I've been in the standard tax bracket so it was never an issue, but I was wondering if I would be eligible for the higher rate tax relief on the pension contributions? If so, how do I claim this as there is nowhere on the self assessment form to note the salary sacrifice pension (the net amount of earnings is noted, i.e. after the pension is deducted).
While I'm happy to pay my share of taxes I obviously don't want to pay more than I have to, so any advice is welcome.
I'm resident in Scotland if that makes a difference.
Thanks everyone!
Banana

BoGoF

If you are on salary sacrifice you have already had full relief st source as you have not paid tax on the amount sacrificed.

cloud_dog

Additionally, the SS amount is from the company and so, in essence what SS does is to lower your actual (taxable) salary (which may or may not take you out of the 40% tax bracket.

Did you know that by making contributions in to your pension via SS, for a 40% tax payer you save an additional 2% NI contributions, and for a 20 tax payer you save an additional 12% NI contributions.

It is obviously (?? / probably) a little too late to do anything in this regard for this FY but something perhaps to consider going forward.

sheramber

BoGoF wrote: »

If you are on salary sacrifice you have already had full relief st source as you have not paid tax on the amount sacrificed.

I think the point the OP is making is that her salary is only taxed at basic rate so relief on SS has been given at basic rate.
But when she adds her self employment to her salary she becomes liable to higher rate tax on part of her total income.

She is asking about claiming the additional relief due to that higher rate liability.

BoGoF

sheramber wrote: »

I think the point the OP is making is that her salary is only taxed at basic rate so relief on SS has been given at basic rate.
But when she adds her self employment to her salary she becomes liable to higher rate tax on part of her total income.

She is asking about claiming the additional relief due to that higher rate liability.

The answer is still the same......there is nothing further to claim as their total taxable income is still less than it would be without salary sacrifice. Lets say income from employment before salary sacrifice is £40k and self-employed income of £20k. With no salary sacrifice taxable income is £60k

But if pension contributions through salaary sacrifice is £10k then employment income becomes £30k and total taxable income of £50k. Therefore they have saved £10k at higher rate so no further relief due.

Dazed_and_confused

BoGoF is absolutely spot on. There is no additional tax relief which can be claimed. For two reasons.

Firstly the reduction in taxable salary has already ensured the maximum possible tax relief has been received. The fact that the job was one where basic rate tax was being paid is irrelevant, it has reduced the amount of income overall which would otherwise be taxed at 40%.

Secondly salary sacrifice means the op hasn't actually paid any pension contributions. Her employer has and you cannot claim tax relief for an employer contribution. Not that you need to because of point 1.

Scottish_Banana

Thanks everyone, especially Bogof and Dazed and Confused for explaining so clearly. I hadn't thought there was anything further to claim but a friend had suggested I check it out re the 40% tax relief on personal pension contributions for higher rate taxpayers.
FWIW my salary from the Hospice is £24000 before salary sacrifice, so higher rate tax isn't usually something I need to think about ��
Thanks again ��

Dazed_and_confused

Presumably this friend was unaware you aren't actually paying anything into a pension!