Getting out the 40% Tax bracket by increasing Pension Contributions.

Fly100

Hello all,

As per topic really, but with a little twist.
Scenerio

Full time employeed @ £46500 per anum 10% Pension contrinution under Salary Sacrifice system.
Part time £6500 per annum paying income Tax. No pension.

Result £53000 per annum, if I up my pension to 15% on my main job am I right in thinking that would drop me out of the 40% band  ( well all but £200 the online calculators say).

And is the most Tax efficient way to do it ?

As ever many thanks for any input.

Fly

BoGoF

Is the £46,500 pre or post salary sacrifice? If pre then you are not going to be higher rate.

[Deleted User]

BoGoF said:

Is the £46,500 pre or post salary sacrifice? If pre then you are not going to be higher rate.

More likely post. £51667 pre salary sacrifice. 15% sacrifice takes it down to £43916 plus £6500 other earnings is £50416 - around the £200 over the amount above which higher rate kicks in. 

But we’ll see!

Dazed_and_C0nfused

My vote would be the £46,500 is the (completely irrelevant) salary amount.

And the taxable pay is just £41,850 after the amount sacrificed for additional employer pension contributions is taken into account.

But no doubt the op will enlighten us with the facts in due course.

Fly100

BoGoF said:

Is the £46,500 pre or post salary sacrifice? If pre then you are not going to be higher rate.

apologies thats pre Sal Sac and my Tax code is 780L due to a company vehicle

Dazed_and_C0nfused

Fly100 said:

BoGoF said:

Is the £46,500 pre or post salary sacrifice? If pre then you are not going to be higher rate.

apologies thats pre Sal Sac and my Tax code is 780L due to a company vehicle

So is your taxable pay from the main job going to be ~£41,850?

How much do you estimate your company benefit to be in 2023-24 (the taxable amount to be reported on a P11D)?

Do you have any other taxable income not previously disclosed?

Fly100

Dazed_and_C0nfused said:

Fly100 said:

BoGoF said:

Is the £46,500 pre or post salary sacrifice? If pre then you are not going to be higher rate.

apologies thats pre Sal Sac and my Tax code is 780L due to a company vehicle

So is your taxable pay from the main job going to be ~£41,850?

How much do you estimate your company benefit to be in 2023-24 (the taxable amount to be reported on a P11D)?

Do you have any other taxable income not previously disclosed?

Its a van so will remian the same, tax code already issued @780L and not other income othere than the £46500 & £6500 mentioned above.

Thanks for input on this.

FLY

molerat

Your tax code is irrelevant, it is the P11D value of the vehicle that is needed as that makes up your total income.

Dazed_and_C0nfused

molerat said:

Your tax code is irrelevant, it is the P11D value of the vehicle that is needed as that makes up your total income.

This ^^^

Tax code 780L doesn't tie in with the full Personal Allowance of £12,570 and the Van Benefit charge of £3,960, with or without the Van Fuel benefit of £757

BoGoF

Fly100 said:

Dazed_and_C0nfused said:

Fly100 said:

BoGoF said:

Is the £46,500 pre or post salary sacrifice? If pre then you are not going to be higher rate.

apologies thats pre Sal Sac and my Tax code is 780L due to a company vehicle

So is your taxable pay from the main job going to be ~£41,850?

How much do you estimate your company benefit to be in 2023-24 (the taxable amount to be reported on a P11D)?

Do you have any other taxable income not previously disclosed?

Its a van so will remian the same, tax code already issued @780L and not other income othere than the £46500 & £6500 mentioned above.

Thanks for input on this.

FLY

As the van benefit charge is £3960 your tax code would normally be 879L (12750 - 3960). We really need your tax code breakdown to give full advice.

Fly100

My error, I have no idea how i came to the other tax code, mine is as you say is 867L. Apologies