Do I have to file for Self Assessment?

frugalandsave

Hi guys,

i have been offered a new position which will substantially increase my salary. Ill go from 50k basic and 12k OTE to 100k basic and 20k OTE. 

I have been contributing to my Work Pension via Salary Sacrifice to keep me out of the higher tax band, but since the new job will be a lot more, this wont be possible anymore.

If I put lets say 30k to the Pension, the overall Salary should come down to 90k. Since its now 90k would I still have to file for self assessment which is aimed at people with a wage greater than 100k?

At this moment I dont know whether the new company offers salary sacrifice, they are mainly US based with a handful of employees in EMEA. So this I would have to confirm still with them. 

Thanks

frugalandsave

This will be an employed position. 

Pat38493

frugalandsave said:

Hi guys,

i have been offered a new position which will substantially increase my salary. Ill go from 50k basic and 12k OTE to 100k basic and 20k OTE. 

I have been contributing to my Work Pension via Salary Sacrifice to keep me out of the higher tax band, but since the new job will be a lot more, this wont be possible anymore.

If I put lets say 30k to the Pension, the overall Salary should come down to 90k. Since its now 90k would I still have to file for self assessment which is aimed at people with a wage greater than 100k?

At this moment I dont know whether the new company offers salary sacrifice, they are mainly US based with a handful of employees in EMEA. So this I would have to confirm still with them. 

Thanks

My experience was that once I managed my income below 100K for 2 years in a row, I received a note from HMRC saying that I no longer needed to fill out a self assessment.  Unfortunately for quite a few years I was an idiot and didn't manage the situation as I didn't realize how much extra tax I was paying.

That said, filling out a self assessment if you just have one employment income circa £120K with no other complexities is pretty simple and takes about 15 minutes to do.  

Of course, in your situation it's highly desirable to get your income below 100K due to the tapered removal of personal allowance starting at £100K - probably you know that already.  When doing this be aware of any benefits that will also be put against your taxable income (private healthcare etc)

Marcon

frugalandsave said:

Hi guys,

i have been offered a new position which will substantially increase my salary. Ill go from 50k basic and 12k OTE to 100k basic and 20k OTE. 

I have been contributing to my Work Pension via Salary Sacrifice to keep me out of the higher tax band, but since the new job will be a lot more, this wont be possible anymore.

If I put lets say 30k to the Pension, the overall Salary should come down to 90k. Since its now 90k would I still have to file for self assessment which is aimed at people with a wage greater than 100k?

At this moment I dont know whether the new company offers salary sacrifice, they are mainly US based with a handful of employees in EMEA. So this I would have to confirm still with them. 

Thanks

You might have to explain it to them, emphasising that there is a saving in NI for the employer. That normally gets an employer's attention!

frugalandsave

The HR rep said they think its salary sacrifice, but they use a European Accountancy Partner that deals with the payments to the Europe/UK employees. 
Something they confirmed is that they use NEST as the pension provider. Not overly great reviews online and fees seem a little higher. 
Does NEST allow yearly transfer outs to my SIPP or previous Work Pension Provider? 

Dazed_and_C0nfused

frugalandsave said:

The HR rep said they think its salary sacrifice, but they use a European Accountancy Partner that deals with the payments to the Europe/UK employees. 
Something they confirmed is that they use NEST as the pension provider. Not overly great reviews online and fees seem a little higher. 
Does NEST allow yearly transfer outs to my SIPP or previous Work Pension Provider? 

Nest's default method appears to be RAS so does your employer have a different arrangement?

https://www.nestpensions.org.uk/schemeweb/nest/about-pensions/tax-relief-benefits.html

frugalandsave

I have a Job offer, so dont know yet the ins and outs. They are checking with their European Accounts Partner for this. 
Id prefer Relief at Source, so dont have to mess around with claiming it myself. 

In regards to NEST, their options for investments look rather limited and Id prefer a wider range of funds. 

Albermarle

Id prefer Relief at Source, so dont have to mess around with claiming it myself. 

With RAS, you have to claim back any higher rate tax relief.

frugalandsave

Ok thanks for the info, so no way around this then. But I guess its a nice problem to have. 
 
Ill ask when I start whether they can just pay the contribution into my SIPP instead of using NEST. In that case would I also have to claim back any higher rate tax?

Dazed_and_C0nfused

frugalandsave said:

Ok thanks for the info, so no way around this then. But I guess its a nice problem to have. 
 
Ill ask when I start whether they can just pay the contribution into my SIPP instead of using NEST. In that case would I also have to claim back any higher rate tax?

If it's paid under RAS yes.

If it's salary sacrifice there is nothing you can claim as you aren't actually paying into the pension, they are employer contributions.

Most employers won't allow you to choose the provider.  Imagine running payroll for 500 staff and they all chose different providers 😳

NoMore

Dazed_and_C0nfused said:

Most employers won't allow you to choose the provider.  Imagine running payroll for 500 staff and they all chose different providers 😳

While I totally agree and understand this point, they do deal with different banks and current accounts for each employer, so it would be nice if in the future they could adapt their systems to allow the same with pension accounts, it would help people avoid having multiple pensions from multiple jobs. Sign up for a new job and give them your bank details and pension account details so they can pay you. Yes I know there is likely different legislation and rules they have to deal with around pensions, so probably won't happen.