Extra pension payments half way through the year to save paying 40% tax

af1963

Don't over-complicate the details of what's gone in to your pension from various sources, NI, etc.  For avoiding higher rate tax, all you need to do is ensure that the TOTAL taxable income that you earn during the year - after the salary sacrifice has been taken off - ends up below the higher rate threshold.

(Don't forget to allow for any benefits-in-kind, and any other income you may have.)

So for example if you've been paid ( say ) £40000 taxable income to date , including the full-year expected value of b-i-k, you can be paid another £10270 over the remaining 4 months before hitting the limit.  That's £2567 per month.  You can then work out what level of salary sacrifice would reduce your salary to £2567.  ( Replace with your own figures here ... ! ) 

There's no real harm in slightly overpaying, just means a part of your payment will get 20% tax relief (and also save the NI) instead of 40%.  

 

ranger210

Thank you very much Sarahspangles :-)

ranger210

Thanks af1962 :-)