Salary sacrifice and lower my income tax

CaptainWales

Hi. I am currently a higher rate tax payer and pay into my pension via salary sacrifice. 

If I increase the amount I pay into my pension, will this help reduce my overall income? I am looking to try and bring myself back into the 20% tax band. 

On-the-coast

yes it will

Dazed_and_C0nfused

But you won't be contributing to the pension.

You wil be agreeing to a lower salary in return for additional employer contributions.

lisyloo

CaptainWales said:

Hi. I am currently a higher rate tax payer and pay into my pension via salary sacrifice. 

If I increase the amount I pay into my pension, will this help reduce my overall income? I am looking to try and bring myself back into the 20% tax band. 

yes.
You need to bring down your salary to below £50.270 - that value may vary a bit if you have benefits e.g. medical insurance - but it gives you a ballpark.

The caveat is that you won't be able to touch this money until 55/57 (whatever the government of the time decides) even if you really need to.

CaptainWales

My payslip states the YTD figure ive been paid - do o just make sure that figure is under £50,270? Or do i also need toinclude other benefits my employergives like £6 wfh allowance per week? 

Dazed_and_C0nfused

CaptainWales said:

My payslip states the YTD figure ive been paid - do o just make sure that figure is under £50,270? Or do i also need toinclude other benefits my employergives like £6 wfh allowance per week? 

You need to consider all taxable income, including any that is taxed at 0% such as (non ISA) interest or dividends.

The £6/week paid by employer is usually that amount as it is tax free.

CaptainWales

Is there an easy way to find this out or is it a case of looking at YTD figures on my payslip and manually working out how much interest I might earn in a year?