Just over the 100k mark, avoiding tapering Personal Allowance by paying more into Pension?

500pages

I have had a pay raise, and have just gone over the 100k mark. As a result, HMRC put me on a new K tax code that this means that I am going to lose my personal tax allowance because some 'tapering' happens between 100 and 125k.

Someone mentioned I can pay more into my Pension to reduce the taxable amount to below the 100k level - is anyone aware of how I actually make that happen, or any other appropriate route? Thanks

Dazed_and_C0nfused

Only certain types pension contributions will reduce your taxable income.

Others increase your basic rate band rather than reduce your taxable income.  

The good news is that your Personal Allowance isn't based on your taxable income, it's your adjusted net income which matters and pension contributions which don't reduce your taxable income do reduce your adjusted net income.

To understand this better you really need to know what method you are using to contribute more to your pension.

The usual options (when you are contributing more) are,

Net pay or
relief at source

KingOfSnake

Also, if you are employed, see if your employer does "salary sacrifice" for employer pension contributions. This will give you an additional 2% employee NIC relief (plus 1.25% H&SCL from April) plus they usually give a percentage of the employer NIC saving. As always, be careful of annual and lifetime limits (including any growth in pension pot) and speak to regulated IFA if in any doubt. The Government has a free pension advice website and telephone number. The added advantage of salary sacrifice (at source) is that the full amount goes into pension, rather than 58% and then basic rate relief is claimed by the pension company and then you have to claim the additional HR minus BR tax relief from HMRC and get a tax refund. You can then put the tax refund in to pension, and get tax relief on the refund...and so on....and so on. Sal sac rocks!