Child benefit, pensions and avoiding 40% tax

pill84

Hi,
I'm a little confused on the best way to avoid paying 40% tax and also keep child benefit.. Hope you can help.
I was made redundant in April 2020 and was lucky enough to receive ~£48k (£30k tax free) , had a break of 3.5 months and started a new job.
This means my estimated Annual Income this year (according to my payslip) will be £57k.
I now earn £48,500 and pay 5% into a company pension (~200/Month) (~2400.00/Year)
With this in mind, what is the best way to ensure we still receive a) Full Child Benefit and b) Avoid paying 40% tax this year?
I'm happy to pay X into my private pension to dip under £50k but I'm not sure how much I need to pay in.
Is it £7k, or £5.6k (which is then grossed up to £7k), or does the the £2400 I'm paying into my company pension drop the £57k to £54,600?
Also, can I also claim another 20% via a tax return?
Thanks in advance.

Dazed_and_C0nfused

First thing is what method is the £200/month paid?

Is it net pay (will reduce your pay that ends up showing on your P60) or relief at source?

You should be able to tell from your payslip.

pill84

Our pension guide say "Our standard pension scheme operates as a relief at source scheme"
However, I should mention that I opted for Salary Sacrifice (Not sure if this makes a difference to my question above though)
Thanks

Dazed_and_C0nfused

Salary sacrifice means you aren't contributing anything to a pension, your employer is, so there is nothing for you to deduct pension wise.

You are agreeing to a reduced salary in return for the additional employer contributions.

You do not get pension tax relief with salary sacrifice and there is nothing you can claim on your Self Assessment return.  The tax (and NI) benefit comes from having less pay to have tax and NI deducted from in the first place.

For example if you have a "salary" of £60k and sacrifice 10% then your taxable pay (salary) is only actually £54k and this is what would be shown on your P60.

In this situation it is not possible to deduct the £6k as you would be double counting it.

pill84

Ok thanks for clarifying..
So how based on the fact that estimated Annual Income this year (according to my payslip) will be £57k, how much do I need to pay into my private pension?  £7k, or £5.6k (grossed to £7k) to dip below £50k.

Dazed_and_C0nfused

If you want your employer to contribute more it is £7k (which will save you paying 40% tax and 2% NI).

If it is you paying into s relief at source scheme then it is £5.6k which the pension company will add basic rate tax relief to and which does get included on your Self Assessment return.

That assumes you have no other taxable income and the £57k is taxable pay.

pjread

worth checking that £57k is the end of tax year amount from all sources (?) - since you say you were made redundant in April, it's not clear whether you had any income from the previous employer this tax year.  If so, that wouldn't be on your payslips from the new employer.

e.g. if you had pay in lieu of notice, a final salary payment or that £18k 'excess' on the redundancy.  I'm assuming the last would count towards net pay for the child benefit charge, the others certainly would and you should check the last bit if paid this tax year.