P60 & pension payments.

Rorypage

Hi,

I’m about to do my tax return but I have a couple of questions with the Net pay pension scheme (pre tax) . I can’t see any pension contributions on my P60, how does the tax man know that I’ve paid into a pension? I know on a relief at source or private pension you put it into your tax return but what about a Net pay pension? 

For example, If I’ve earned £100,000 and put £13,000 into my pension pot does that make the taxable gross pay £87,000?

I hope someone can clarify this as I don’t want to lose out of my tax relief.

Thanks! 

xylophone

I’m about to do my tax return but I have a couple of questions with the Net pay pension scheme 

See

https://www.litrg.org.uk/tax-guides/tax-basics/do-i-have-join-pension-scheme/do-you-know-how-tax-relief-your-pension

Net pay arrangements

Net pay arrangements are used by many traditional occupational (‘works’) pensions and also some workplace pensions set up under auto-enrolment, and do not require you to do anything to get your tax relief.

Your pension contributions are deducted from your salary by your employer before income tax is calculated on it, so you get relief on the amount immediately at your highest rate of tax.

So, if you earn £300 a week, and pay 5% (£15) in pension contributions, you will only pay tax on wages of £285. As you do not pay tax on the £15 of your earnings that you put in as your pension contribution, you are therefore saving tax of £3 (£15 x 20%), meaning your £15 contribution is only really costing you £12.

You do not usually need to put details of pension contributions made in this way on your Self Assessment tax return (if you complete one) or tell HMRC about the contributions in any other way at all. This is because exactly the correct amount of tax relief is usually given on the contribution via the payroll and there is nothing else to do.

Dazed_and_C0nfused

Rorypage said:

Hi,

I’m about to do my tax return but I have a couple of questions with the Net pay pension scheme (pre tax) . I can’t see any pension contributions on my P60, how does the tax man know that I’ve paid into a pension? I know on a relief at source or private pension you put it into your tax return but what about a Net pay pension? 

For example, If I’ve earned £100,000 and put £13,000 into my pension pot does that make the taxable gross pay £87,000?

I hope someone can clarify this as I don’t want to lose out of my tax relief.

Thanks! 

You are overcomplicating life!

You never need to mention net pay contributions on a Self Assessment return as you have received the maximum possible tax relief each pay day.

You have earned a salary of £100,00 and made net pay contributions of £13,000 so your taxable pay shown on your P60 would be £87,000.

You only show £87,000 on the tax return.  Salary and net pay pension contributions aren't things that get included on the return.

Rorypage

Dazed_and_C0nfused said:

Rorypage said:

Hi,

I’m about to do my tax return but I have a couple of questions with the Net pay pension scheme (pre tax) . I can’t see any pension contributions on my P60, how does the tax man know that I’ve paid into a pension? I know on a relief at source or private pension you put it into your tax return but what about a Net pay pension? 

For example, If I’ve earned £100,000 and put £13,000 into my pension pot does that make the taxable gross pay £87,000?

I hope someone can clarify this as I don’t want to lose out of my tax relief.

Thanks! 

You are overcomplicating life!

You never need to mention net pay contributions on a Self Assessment return as you have received the maximum possible tax relief each pay day.

You have earned a salary of £100,00 and made net pay contributions of £13,000 so your taxable pay shown on your P60 would be £87,000.

You only show £87,000 on the tax return.  Salary and net pay pension contributions aren't things that get included on the return.

I understand that but I don’t have any information on my pension paid on my P60, it’s showing my total gross without any pension deductions. 

Sarahspangles

For example, If I’ve earned £100,000 and put £13,000 into my pension pot does that make the taxable gross pay £87,000?

So based on your example is your P60 showing your salary as £100k, or £87k?

Rorypage

Sarahspangles said:

For example, If I’ve earned £100,000 and put £13,000 into my pension pot does that make the taxable gross pay £87,000?

So based on your example is your P60 showing your salary as £100k, or £87k?

It’s showing £100k. 

Sarahspangles

Rorypage said:

Sarahspangles said:

For example, If I’ve earned £100,000 and put £13,000 into my pension pot does that make the taxable gross pay £87,000?

So based on your example is your P60 showing your salary as £100k, or £87k?

It’s showing £100k. 

When you say it's a Net Pay scheme, is that what the employer calls it?  

zagfles

Rorypage said:

Sarahspangles said:

For example, If I’ve earned £100,000 and put £13,000 into my pension pot does that make the taxable gross pay £87,000?

So based on your example is your P60 showing your salary as £100k, or £87k?

It’s showing £100k. 

There's something very wrong here. Or it's not "net pay".

Where on the P60 are you looking, usually there's a highlighted "This Employment" box which it says to use for tax returns.

What does your last payslip of the tax year show in the gross to date/taxable to date fields?

Have you worked out what you're being charged tax and NI on? If you don't know how (unbelievable how most people are clueless about checking their tax/NI), post all the figures from a couple of consecutive payslips.

If you check your pension scheme statements, do they show tax relief being claimed?

Dazed_and_C0nfused

Rorypage said:

Sarahspangles said:

For example, If I’ve earned £100,000 and put £13,000 into my pension pot does that make the taxable gross pay £87,000?

So based on your example is your P60 showing your salary as £100k, or £87k?

It’s showing £100k. 

Then you haven't paid £13k via net pay.

Or your employer has had a mare!

xylophone

Do you have an asterisk  beside the figure on the P60 indicating that this is the figure you should use in the tax return?

https://osome.com/uk/blog/p60-form-uk-what-is-it-and-how-to-deal-with-it/

Have a look at your salary statements for the year.

Are your pension contributions taken from your salary before or after the deduction of tax?

See

https://www.moneyhelper.org.uk/en/pensions-and-retirement/tax-and-pensions/tax-relief-and-your-pension

https://www.gov.uk/tax-on-your-private-pension/pension-tax-relief