Employed and self employed contributions

deano180

I am currently employed full time and contribute to a pension, I'm a higher rate tax payer and I'm considering doing some extra work effectively being paid straight into my bank account prior to any tax or deductions. If I contribute 100% of these  earnings to my DC pension do I need to complete a self assessment for these additional earnings? I assume I will need to pay the extra National insurance, what happens with the tax on the earnings,  cause I'm putting it straight into the pension I should not need to pay any? I'm trying to achieve maximizing this money to the full, I will be well within the maximum 40k contributions per annum.

Marcon

deano180 said:

I am currently employed full time and contribute to a pension, I'm a higher rate tax payer and I'm considering doing some extra work effectively being paid straight into my bank account prior to any tax or deductions. If I contribute 100% of these  earnings to my DC pension do I need to complete a self assessment for these additional earnings? 

Yes. You need to be registered as self employed with HMRC if you are doing this work on a self employed basis, which appears to be the case.

deano180 said:

I assume I will need to pay the extra National insurance, what happens with the tax on the earnings,  cause I'm putting it straight into the pension I should not need to pay any? I'm trying to achieve maximizing this money to the full, I will be well within the maximum 40k contributions per annum.

You'd pay 80% of these gross earnings into your DC pension and the provider will claim basic rate tax relief on your behalf and add it to your pension pot.

Dazed_and_C0nfused

deano180 said:

I am currently employed full time and contribute to a pension, I'm a higher rate tax payer and I'm considering doing some extra work effectively being paid straight into my bank account prior to any tax or deductions. If I contribute 100% of these  earnings to my DC pension do I need to complete a self assessment for these additional earnings? I assume I will need to pay the extra National insurance, what happens with the tax on the earnings,  cause I'm putting it straight into the pension I should not need to pay any? I'm trying to achieve maximizing this money to the full, I will be well within the maximum 40k contributions per annum.

Making contributions to a relief at source pension normally won't make any difference whatsoever to the amount of your income that gets taxed.

The exception to this is where they reduce your adjusted net income and give you back some lost Personal Allowance (ANI > £100k).

Other than that they will only change the rate of tax your income is taxed at.

And yes, assuming this is self employment and the turnover exceeds £1,000 you will need to complete a Self Assessment return.

DT2001

Marcon said:

deano180 said:

I am currently employed full time and contribute to a pension, I'm a higher rate tax payer and I'm considering doing some extra work effectively being paid straight into my bank account prior to any tax or deductions. If I contribute 100% of these  earnings to my DC pension do I need to complete a self assessment for these additional earnings? 

Yes. You need to be registered as self employed with HMRC if you are doing this work on a self employed basis, which appears to be the case.

deano180 said:

I assume I will need to pay the extra National insurance, what happens with the tax on the earnings,  cause I'm putting it straight into the pension I should not need to pay any? I'm trying to achieve maximizing this money to the full, I will be well within the maximum 40k contributions per annum.

You'd pay 80% of these gross earnings into your DC pension and the provider will claim basic rate tax relief on your behalf and add it to your pension pot.

80% of income after any expenses in carrying out your self employed work (use of home, lap top, mileage, OH as employee to do admin or children if over 13). HMRC  do not tend to query reasonable costs especially if you keep records.
When you complete your self assessment there is a line for pension contributions which will ‘adjust’ your tax threshold. NI due will depend on self employed income as it has separate rules to PAYE.