Income Tax and Pension Contributions

pollyanna24

With my gross income, I would be just over the £50,270.  

I had thought that if I put into my employee's pension so that I would be below this rate, then I wouldn't become a high tax payer.  However, I just been sent an e-mail saying that my tax band is being adjusted and after logging into my HMRC account, it is because they are taking all my income as "taxable income."  

Have I been under the wrong impression all this time?  

molerat

What type of pension deductions are being made, net pay where the deduction is before tax or relief at source where a tax credit is added by the pension provider ?

pollyanna24

I'm not sure.  How would I find this out?  One is a NEST pension paid by my main employer and the other is a PACE pension paid by my other employer who is a local supermarket.  

DE_612183

Can you confirm that your tax CODE is being adjusted and what it os - HMRC Personal Tax Account will tell you this.

In reality moving into the higher tax band only affects that income in excess of the threshold - so if you were £1000 over youd pay £400 tax not £250 - so it's only £150 more tax - but you're actually £600 more in your pocket...

pollyanna24

On the payslip for the supermarket, it says "Pace 10 Percent Pre Tax Deduction Employees Contribution"

I am trying to view the payslip for my main job, but I cannot log in at present.  

Nomunnofun1

DE_612183 said:

Can you confirm that your tax CODE is being adjusted and what it os - HMRC Personal Tax Account will tell you this.

In reality moving into the higher tax band only affects that income in excess of the threshold - so if you were £1000 over youd pay £400 tax not £250 - so it's only £150 more tax - but you're actually £600 more in your pocket...

£400 as opposed to £200?

Nomunnofun1

pollyanna24 said:

With my gross income, I would be just over the £50,270.  

I had thought that if I put into my employee's pension so that I would be below this rate, then I wouldn't become a high tax payer.  However, I just been sent an e-mail saying that my tax band is being adjusted and after logging into my HMRC account, it is because they are taking all my income as "taxable income."  

Have I been under the wrong impression all this time?  

What do you mean by ‘your tax band is being adjusted’?

pollyanna24

My old tax code was 1257L and they are changing it to 1182L for my main occupation.  The second occupation is and has always been BR.

pollyanna24

Nomunnofun1 said:

pollyanna24 said:

With my gross income, I would be just over the £50,270.  

I had thought that if I put into my employee's pension so that I would be below this rate, then I wouldn't become a high tax payer.  However, I just been sent an e-mail saying that my tax band is being adjusted and after logging into my HMRC account, it is because they are taking all my income as "taxable income."  

Have I been under the wrong impression all this time?  

What do you mean by ‘your tax band is being adjusted’?

Apologies: The literal words used in the e-mail were: "You have a tax code change"

pollyanna24

I also pay into a private pension.  This is with Standard Life, but as it is nothing to do with employment and I only pay tax PAYE, I'm assuming HMRC have nothing to do with this unless I were to submit a Tax Return?

Should I start submitting a Tax Return because of going over the £50,270, although it will most likely only be for the year 2024/25 that this will happen.  It will be lower than that next year even not taking pensions into account.  

DRS1

If you dig a little there should be an explanation of the new tax code and a calculation showing how they got to the new one.  It could be as simple as having some untaxed savings interest.