Increased Pension Contributions and tax taper rate 9 January at 7:55PM in Cutting tax 3 replies 109 views

mcnicm20

I’m going to hit the £100k taper rate and have been told I can increase my pensions contributions for the rest of the tax year up to 50%, will that impact the amount of tax I pay and or the taper rate please? 

Thank you 

Dazed_and_C0nfused

Tapered Personal Allowance is based on adjusted net income and pension contributions generally reduce that, making them very tax efficient.

But you need to know which method would be used to get the money into the pension to fully understand how this would work.

The normal options are,

Net pay

Relief at source
Salary sacrifice

mcnicm20

Unfortunately not a clue. I work from an umbrella company so they’re just increasing my employee contributions 

Grumpy_chap

Most Umbrella Companies will operate pension as Salary Sacrifice.