Tax/pension advice - who can I get to advise?

rln

Hi, I would appreciate any advice anyone can provide..

We are in the very fortunate position that my husband's salary may soon creep over 100k. We have 3 young children so benefit from funded hours/tax free childcare .

I have tried to work out what we need to do to calculate his adjusted net income and believe we can make additional pension contributions...but I am stuck on the detail of all of this and would just like to employ someone to help us work it out.

Who do I need to approach? We have tried IFAs but they all talk about investments and pension sizes in the hundreds of thousands (his is public sector). We don't have any cash to invest so they aren't interested in us. 

Any tips or what we should ask for/who we should look for?

Thanks

Dazed_and_C0nfused

Personally I think you would be wasting your money.  It genuinely isn't that difficult.

There are four key things you need to know,

1.  His total taxable income (estimated if need be)

2.  His total gross pension contributions

3.  The method(s) used to make those contributions

4.  Details of any Gift Aid donations (either the net or gross value).

rln

Thanks for replying..I know it must sound simple but we are really confusing ourselves.

1. Annual salary will be approx 108000 but this includes approx 4000 which is a non pensionable allowance.

2/3. It's a civil service alpha pension. Employee contributions will be 7.35%. they are just taken automatically on the payslip each month... 

4 no gift aid (we do that in my name)

I would really appreciate any additional guidance?

I've calculated that losing the funded hours and tax free childcare will cost us an extra £10k a year which we definitely can't afford. 

john23lloyd

I have exactly the same issue. I appreciate it's a nice problem to have, but falling over the 100k barrier, with three children requiring childcare, means a much larger outlay.

I have all the details above. But what do I do with them?

Thanks for your help

Dazed_and_C0nfused

rln said:

Thanks for replying..I know it must sound simple but we are really confusing ourselves.

1. Annual salary will be approx 108000 but this includes approx 4000 which is a non pensionable allowance.

2/3. It's a civil service alpha pension. Employee contributions will be 7.35%. they are just taken automatically on the payslip each month... 

4 no gift aid (we do that in my name)

I would really appreciate any additional guidance?

I've calculated that losing the funded hours and tax free childcare will cost us an extra £10k a year which we definitely can't afford. 

Salary is completely irrelevant when it comes to adjusted net income.

Alpha (a net pay scheme) is a simple one, you cannot claim those contributions as a deduction when calculating adjusted net income.  The reason for that is that they are already factored in when establishing his taxable earnings (P60 pay figure).

So using earnings of £108,000 and 7.35% on £104,000 would give you an expected P60 pay figure of £100,536.  That is your starting point.

Next step is what other taxable income does he have?

Note that taxable interest or dividends which are taxed at 0% have to be included here.

Dazed_and_C0nfused

john23lloyd said:

I have exactly the same issue. I appreciate it's a nice problem to have, but falling over the 100k barrier, with three children requiring childcare, means a much larger outlay.

I have all the details above. But what do I do with them?

Thanks for your help

You use them to calculate your ANI.

You add up all taxable income.

Then deduct any Gift Aid donations (the gross contribution).

Then deduct any relief at source pension contributions (the gross contribution).

You cannot usually deduct any other type of pension contribution.

There are other factors but that covers the things that apply to most people.

john23lloyd

Dazed_and_C0nfused said:

john23lloyd said:

I have exactly the same issue. I appreciate it's a nice problem to have, but falling over the 100k barrier, with three children requiring childcare, means a much larger outlay.

I have all the details above. But what do I do with them?

Thanks for your help

You use them to calculate your ANI.

You add up all taxable income.

Then deduct any Gift Aid donations (the gross contribution).

Then deduct any relief at source pension contributions (the gross contribution).

You cannot usually deduct any other type of pension contribution.

There are other factors but that covers the things that apply to most people.

Thank you.

Can I use salary sacrifice, for a car, to reduce the total salary in the same way a pension does?

Dazed_and_C0nfused

john23lloyd said:

Dazed_and_C0nfused said:

john23lloyd said:

I have exactly the same issue. I appreciate it's a nice problem to have, but falling over the 100k barrier, with three children requiring childcare, means a much larger outlay.

I have all the details above. But what do I do with them?

Thanks for your help

You use them to calculate your ANI.

You add up all taxable income.

Then deduct any Gift Aid donations (the gross contribution).

Then deduct any relief at source pension contributions (the gross contribution).

You cannot usually deduct any other type of pension contribution.

There are other factors but that covers the things that apply to most people.

Thank you.

Can I use salary sacrifice, for a car, to reduce the total salary in the same way a pension does?

Yes.  But don't forget you then have a company car benefit to add to your taxable income.

john23lloyd

Dazed_and_C0nfused said:

john23lloyd said:

Dazed_and_C0nfused said:

john23lloyd said:

I have exactly the same issue. I appreciate it's a nice problem to have, but falling over the 100k barrier, with three children requiring childcare, means a much larger outlay.

I have all the details above. But what do I do with them?

Thanks for your help

You use them to calculate your ANI.

You add up all taxable income.

Then deduct any Gift Aid donations (the gross contribution).

Then deduct any relief at source pension contributions (the gross contribution).

You cannot usually deduct any other type of pension contribution.

There are other factors but that covers the things that apply to most people.

Thank you.

Can I use salary sacrifice, for a car, to reduce the total salary in the same way a pension does?

Yes.  But don't forget you then have a company car benefit to add to your taxable income.

Is that the annual BIK rate or something else? Sorry, that's probably a stupid question!

Dazed_and_C0nfused

john23lloyd said:

Dazed_and_C0nfused said:

john23lloyd said:

Dazed_and_C0nfused said:

john23lloyd said:

I have exactly the same issue. I appreciate it's a nice problem to have, but falling over the 100k barrier, with three children requiring childcare, means a much larger outlay.

I have all the details above. But what do I do with them?

Thanks for your help

You use them to calculate your ANI.

You add up all taxable income.

Then deduct any Gift Aid donations (the gross contribution).

Then deduct any relief at source pension contributions (the gross contribution).

You cannot usually deduct any other type of pension contribution.

There are other factors but that covers the things that apply to most people.

Thank you.

Can I use salary sacrifice, for a car, to reduce the total salary in the same way a pension does?

Yes.  But don't forget you then have a company car benefit to add to your taxable income.

Is that the annual BIK rate or something else? Sorry, that's probably a stupid question!

It's the actual benefit in kind.  Which can vary from tax year to another as the car might be unavailable for differing periods or the car benefit multiplier could change.

For instance if you got a car today it might be manufacturers list price x 5% for say 151/365 days.

Then next tax year it would be same list price X maybe 6% for the whole tax year.

john23lloyd

Dazed_and_C0nfused said:

john23lloyd said:

Dazed_and_C0nfused said:

john23lloyd said:

Dazed_and_C0nfused said:

john23lloyd said:

I have exactly the same issue. I appreciate it's a nice problem to have, but falling over the 100k barrier, with three children requiring childcare, means a much larger outlay.

I have all the details above. But what do I do with them?

Thanks for your help

You use them to calculate your ANI.

You add up all taxable income.

Then deduct any Gift Aid donations (the gross contribution).

Then deduct any relief at source pension contributions (the gross contribution).

You cannot usually deduct any other type of pension contribution.

There are other factors but that covers the things that apply to most people.

Thank you.

Can I use salary sacrifice, for a car, to reduce the total salary in the same way a pension does?

Yes.  But don't forget you then have a company car benefit to add to your taxable income.

Is that the annual BIK rate or something else? Sorry, that's probably a stupid question!

It's the actual benefit in kind.  Which can vary from tax year to another as the car might be unavailable for differing periods or the car benefit multiplier could change.

For instance if you got a car today it might be manufacturers list price x 5% for say 151/365 days.

Then next tax year it would be same list price X maybe 6% for the whole tax year.

That's great thank you for your help