Tapered annual allowance sadness

OneAimMan

Please help. I'm at my wits end. I've spent two days trying to calculate my tapered annual allowance charge, but keep reading confusing and conflicting advice, even when I have spoken to a local tax advisor.

I have a gross figures for salary (A), bonus amount (B), and other sources of income (C) to start. I received pension contribution from my employer (D), and I salary sacrificed some pay each month into my pension (E). 
Part of the confusion is I do not have a total figure for overtime payments received (F), and benefits received through payroll (G) which changed throughout the year. See below, where I hope P60 removes this hassle.

Questions:

• How do I calculate threshold (TI) and adjusted income (AI)? Please respond in the form e.g. TI = A+B.... and AI = A+C - E, etc.
• All articles suggest starting with net income from employment. Due to complex and messy overtime and benefits, can I use my P60 "pay" and "tax deducted" figure instead of going through all the pay slips? If so, please state exactly how P60 fits into the formula you suggest?
• Also, it would be great if someone could explain how P60 handles salary scarified pension contributions (from the employer or what I choose to sacrifice from my monthly pay)

This feels much more complicated than it should be, or I'm overthinking it, so I hope someone can clarify things before I lose the last bit of hope.

Cheers

Marcon

OneAimMan said:

Please help. I'm at my wits end. I've spent two days trying to calculate my tapered annual allowance charge, but keep reading confusing and conflicting advice, even when I have spoken to a local tax advisor.

I have a gross figures for salary (A), bonus amount (B), and other sources of income (C) to start. I received pension contribution from my employer (D), and I salary sacrificed some pay each month into my pension (E). 
Part of the confusion is I do not have a total figure for overtime payments received (F), and benefits received through payroll (G) which changed throughout the year. See below, where I hope P60 removes this hassle.

Questions:

• How do I calculate threshold (TI) and adjusted income (AI)? Please respond in the form e.g. TI = A+B.... and AI = A+C - E, etc.
• All articles suggest starting with net income from employment. Due to complex and messy overtime and benefits, can I use my P60 "pay" and "tax deducted" figure instead of going through all the pay slips? If so, please state exactly how P60 fits into the formula you suggest?
• Also, it would be great if someone could explain how P60 handles salary scarified pension contributions (from the employer or what I choose to sacrifice from my monthly pay)

This feels much more complicated than it should be, or I'm overthinking it, so I hope someone can clarify things before I lose the last bit of hope.

Cheers

If you were in employment on 5 April, the P60 shows your pay/tax deducted during the tax year (and NI contributions). If you have made pension contributions by salary sacrifice, then your P60 will reflect the fact that your salary was lower, and the tax you paid also lower. It's as simple as that. A P60 won't take account of how much you sacrificed, or what your employer contributed to your pension.

This is clearly driving you to distraction - so why not pay for some proper advice and let someone else do the work for you? If you're into tapering, it could be money well spent.

OneAimMan

Marcon said:

A P60 won't take account of how much you sacrificed, or what your employer contributed to your pension.

This is clearly driving you to distraction - so why not pay for some proper advice and let someone else do the work for you? If you're into tapering, it could be money well spent.

I have all the figures for employee and employer contributions. It's the overtime and benefits handling that I was questioning with the P60.

I did speak to one advisor already. They were well intentioned, but raised doubts on correctness, and I do not want to get this wrong.  I am waiting for another advisor, but of-course they are busy with only a few days remaining to submit.

I was hoping someone has experience working out threshold and adjusted income

Marcon

OneAimMan said:

Marcon said:

A P60 won't take account of how much you sacrificed, or what your employer contributed to your pension.

This is clearly driving you to distraction - so why not pay for some proper advice and let someone else do the work for you? If you're into tapering, it could be money well spent.

I have all the figures for employee and employer contributions. It's the overtime and benefits handling that I was questioning with the P60.

I did speak to one advisor already. They were well intentioned, but raised doubts on correctness, and I do not want to get this wrong.  I am waiting for another advisor, but of-course they are busy with only a few days remaining to submit.

I was hoping someone has experience working out threshold and adjusted income

I can only repeat what I've said above about what is included on your P60.

Did you get a P11D from your employer?

OneAimMan

Marcon said:

OneAimMan said:

Marcon said:

A P60 won't take account of how much you sacrificed, or what your employer contributed to your pension.

This is clearly driving you to distraction - so why not pay for some proper advice and let someone else do the work for you? If you're into tapering, it could be money well spent.

I have all the figures for employee and employer contributions. It's the overtime and benefits handling that I was questioning with the P60.

I did speak to one advisor already. They were well intentioned, but raised doubts on correctness, and I do not want to get this wrong.  I am waiting for another advisor, but of-course they are busy with only a few days remaining to submit.

I was hoping someone has experience working out threshold and adjusted income

I can only repeat what I've said above about what is included on your P60.

Did you get a P11D from your employer?

No P11D, as benefits are processed through monthly payroll.

OneAimMan

Bump. One more try in case anyone else knows the answer.

Milltir

Tapered annual allowance doesn't impact me yet, but might in the future if I get made redundant later in a tax year, so I only have a cursory knowledge. I agree the info online is confusing, the Royal London "advisor" info was the best I found. Presumably if you have no P11D then our employer has taken any tax owed for any benefits already from your pay? If so then the starting point should be P60 pay + other income (interest earned, dividends, rental etc). What happens if you plug the numbers into a HMRC online tax return? Won't it calculate what you owe?

OneAimMan

> What happens if you plug the numbers into a HMRC online tax return? Won't it calculate what you owe?

No. There is simply a section in your SA for you to state how much you have exceeded the annual allowance. That is then taxed at your marginal rate.