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How to work out avoiding 40% tax on salary
longwalks1
Posts: 3,840 Forumite
in Cutting tax
What details will I need to provide on here for someone to work out how much I need to put away each month to avoid paying 40% tax please? I participate in a work shares scheme, and currently overpay my pension but I'd like to reduce my overpayments into that and pay into an ISA instead. My pension is already healthy for my age, so trying to find a happy medium without paying too much tax.
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Comments
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Payments into your pension will get tax relief. So if you switch contributions from pension to ISA, you will pay more tax .
If you lose 40% tax relief, then the amount of tax you pay will increase significantly.1 -
Hi Albermarle, yes i knew that but as my pension doesn't really need the amount going into it that it has had over the last few years (I've been paying an additional 10% of my salary, as well as my employers and my pension contributions of a combined 15%, so 25% going in) the total SIPP value is already high.
I want to continue saving into an S&S ISA to cover a period of time should I choose to finish work before I can draw my pension at 57 (I'm currently 44). I want to put just enough into my pension to avoid the 40% tax on my salary, and wasn't sure how to calculate this, given I have 2 or 3 other deductions coming out of my salary before tax as well (share saving schemes)
Hope that makes sense, apologies as on night shifts this week0 -
What is your salary before pension contributions?1
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Hello purdyoaten2
my monthly wage slip says:BASICPAY
£3,833.42
CONT OT
£268.34
SHIFT
£540.92
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I think you really need to provide more detail for anyone to help with this.
What do you expect your P60 to show your taxable pay as next April?
What method are you using to contribute to the pension at the moment, relief at source, net pay or salary sacrifice?
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Why do you want to avoid the 40% tax bracket?
All you're doing is reducing your take home pay.0 -
If your pension fund is nearing £1 million then it's healthy...0
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