Is cash car allowance "earned income" so eligible for SIPP tax reclaim

sweeter_strudel

I'd appreciate your collective knowledge when the HMRC pages are hiding the info, I know not where.... I hope I am using the words earned income in the correct context.

I get paid a cash car allowance, added to my salary every month. I am in the process of maxing out my SIPP contributions to 100% of my annual earnings / up to £60k - whichever is lower - in the last couple of years of full time work, to gain max benefit from reclaiming tax paid.

I know my employer doesn't use the car allowance when calculating how much pension contributions they pay to my workplace pension.

But when I am trying to work out what my total earned income is for SIPP purposes, can I take the figure to be my salary plus the car allowance, minus the employer and minus my own contributions to the workplace pension.

I obviously end up paying tax on the car allowance so in fairness I'd think the answer must be "yes".... just can't see it written anywhere in black and white.

Of course with / without the car allowance puts me above / below the £60k annual allowance limit, hence the query.

Thanks y'all.

kinger101

Car allowance is treated same as salary, so part of earnings for purpose of making pension contributions.

You mention the 60K annual allowance.

Do you have any unused allowance from the previous three years?

Dazed_and_C0nfused

sweeter_strudel said:

I'd appreciate your collective knowledge when the HMRC pages are hiding the info, I know not where.... I hope I am using the words earned income in the correct context.

I get paid a cash car allowance, added to my salary every month. I am in the process of maxing out my SIPP contributions to 100% of my annual earnings / up to £60k - whichever is lower - in the last couple of years of full time work, to gain max benefit from reclaiming tax paid.

I know my employer doesn't use the car allowance when calculating how much pension contributions they pay to my workplace pension.

But when I am trying to work out what my total earned income is for SIPP purposes, can I take the figure to be my salary plus the car allowance, minus the employer and minus my own contributions to the workplace pension.

I obviously end up paying tax on the car allowance so in fairness I'd think the answer must be "yes".... just can't see it written anywhere in black and white.

Of course with / without the car allowance puts me above / below the £60k annual allowance limit, hence the query.

Thanks y'all.

This is probably a good starting point.

https://www.gov.uk/hmrc-internal-manuals/pensions-tax-manual/ptm044100

The normal take on car allowance is it's just extra earnings paid under another guise.  And will be part of the income shown on your P60.

You only include employer contributions for annual allowance purposes, not when working out the tax relief limit.