Multiple part-time jobs- income over £50000-is 40% tax relief on pension contributions x 3 possible

1970Michael

Hello,

Hoping to get some advice about a pensions/ tax relief situation I'm scratching my head about....

I work for the NHS part time as a senior project manager and earn around 37000. I also have a second job in industry where I earn 12000. My industry job is going to increase to around 18000, and I also have just been offered some contracted consultancy work over 12 months, at 10000. 

I'm paying into my nhs and my industry pension, and can also make pension payments in my 12 month contract (same industry but related setting, linked to my job but set up as a separate piece of work). 

As I'll be into the 40% tax bracket overall, what I'm trying to figure out is how I can get the 40% tax relief on my pension payments in my 3 roles, given that none of them hit the higher tax threshold individually? 

Has anyone been in a similar situation, or has any wise words on if this is possible? It seems unfair if not, but I'll be honest I am struggling to navigate the system.

Thanks!

Dazed_and_C0nfused

Is your NHS job a "net pay" scheme?

What method will you use to contribute at job 2 and job 3?

1970Michael

All 3 post are contracts, figures are my gross pay in each- with mine and employer contributions to pension taken from this. 

Dazed_and_C0nfused

You need to clarify what method you are using to contribute to the pensions.

The two usual options are,

Net pay

Relief at source

https://www.nhsemployers.org/articles/pension-contributions-and-tax-relief

But there is also salary sacrifice but that would mean you aren't contributing

1970Michael

Hi- sorry, as you can tell I'm a bit confused with it! I pay tax after pension payments are taken from my gross salary in each of my jobs. So gross salary around 61000- making pension payments across pre tax across the 3 jobs of around 8% overall gross salary.

Dazed_and_C0nfused

Then the answer is you are already receiving the maximum possible tax relief.

This can be a tricky one for some people to get their head around so the simplest way to understand it is to do two calculations.

Firstly calculate your tax liability as it is now i.e. with your pension contributions reducing the amount of wages/salary so your taxable pay (the amount that is shown on your P60) is the correct amount.

Then calculate the tax due without the pension contributions and compare the two.  You will find you have in fact received the correct amount of tax relief.  Added bonus is you never have to tell HMRC about anything as you have automatically received the maximum possible tax relief due.

All of the above is based on you making "net pay" contributions in all three jobs.  If you have got that bit wrong you will need to explain what the correct method is for each job.

I pay tax after pension payments are taken from my gross salary in each of my jobs.