Can I increase my contributions

Julia1927

Female 63. DB pension NRD 65. SP 66.
Am currently working 2 part time roles.
One at 20 hours a week earning £9k per year with auto enrollment into NOW pension which I believe is now increasing to 5% contribution.

Second job 15 hours a week earning £7k per year contributing max of 7.5% to salary sacrifice pension which employer is matching.

Hmrc have confirmed my tax code this year will be split over both employers with 900L to job one and 350L to job two.

As I am earning over my PA I wondered if any of you kind folk could help me understand if there is anyway of reducing the £700 tax bill I will be charged this year?

I thought about increasing the amount I contribute into my 2nd job sal sac pension but apparently this will take me below minimum wage so is not allowed.

Is it worth my approaching my 1st job employer and asking for my contributions to be increased. Is this even allowed? If it is, is there a simple way of working out how much I should increase my contribution to?

Many thanks.

F_T_Buyer

If you put the 3,500 gross into the pension - £2,800 Net for this year you will avoid basic income tax. You'll probably find it's easy to make a one off contribution.

I'm with Aviva and you can make one off contributions through the website. For every 80 pence you put in, they claim 20 pence tax back making it £1.00.

Marcon

F_T_Buyer wrote: »

If you put the 3,500 gross into the pension - £2,800 Net for this year you will avoid basic income tax. You'll probably find it's easy to make a one off contribution.

OP has asked how to reduce her £700 tax bill. Doing what you suggest won't have any impact on that; the pension provider will claim tax relief on the (net) contribution she pays in.

Dazed_and_confused

Agree with Marcon, a relief at source contribution won't reduce the tax payable on the two part time jobs.

But the op's figures don't make sense.

If taxable income was £16k the tax (outside of Scotland) would be £700.
£16,000 - £12,500 = £3,500 x 20% = £700.

But if the salary at the second job is £7,000 and 7.5% is salary sacrificed then the taxable income from this job would be £6,475 which would already reduce the tax payable to £595.

If the NOW pension contributions are "net pay" then increasing these would reduce the taxable income at the first job and this would in turn free up more Personal Allowance to be available to use against the second job.

Dox

Dazed_and_confused wrote: »

If the NOW pension contributions are "net pay" then increasing these would reduce the taxable income at the first job and this would in turn free up more Personal Allowance to be available to use against the second job.

NOW pensions are indeed net pay, so contributing more to your NOW pension would reduce your tax liability. Check with your employer how to go about it.

NOW has promised to top up contributions for non-taxpayers. See https://www.nowpensions.com/help-centre/faqs/contributions/how-are-employee-contributions-collected

Julia1927

Thank you so much for your help so far!
Any thoughts, hints or tips on how I would calculate the most favourable % increase to the NOW pension in my circumstances prior to speaking to my employer? (I have tried numerous ways of attempting to work it out for myself including online calculators but I just cannot get my head around it)

Dazed_and_confused

Until you clarify what your taxable income is it is impossible to be certain.

Is job 2 £7,000 or £6,475. Or something else?

Why is tax code for job 1 900L if salary is £9k and you are contributing something (currently unknown) to NEST via a net pay arrangement? Or is salary say £9,500 less £500 net pay pension contribution giving taxable salary of £9,000?

Is paying no tax the aim, even if this means significant pension contribution increases?

Dox

Dazed_and_confused wrote: »

Until you clarify what your taxable income is it is impossible to be certain.

Is job 2 £7,000 or £6,475. Or something else?

Why is tax code for job 1 900L if salary is £9k and you are contributing something (currently unknown) to NEST via a net pay arrangement? Or is salary say £9,500 less £500 net pay pension contribution giving taxable salary of £9,000?

Is paying no tax the aim, even if this means significant pension contribution increases?

OP has a NOW pension (net pay) - NEST is relief at source.

Julia1927

Hi D&C,
Job 1 I completed a full year with a salary of £9090 and taxable earnings of £9007 with pensionable pay showing £7793. EE's pension contribution for the full year £82.67 and ER's £55.11 (Every little helps )

Job 2 I started last October so 6 months to 5th April 2019. Taxable income shows as £3123. I don't know what the pensionable pay will be for a full year in this job, just that my salary over 12 months will be £6900 and I will be contributing 7.5% via salary sacrifice to my pension.

I have received an advisory notice from HMRC showing tax codes for 19/20 tax year as follows:
Total tax free allowance £12560 (including uniform allowance)
Job 1: £9082
Job 2: £3478

Thank you ��