2024 pension lump sum

[Deleted User]

Karen1980_Lily said:

TheSpectator said:

penners324 said:

Your DC pension will add 25%.

There's no extra to claim back. You're very close but below the 40% threshold on your salary plus interest anyway. Even if you go over the threshold it's a very small amount you could claim

Not so sure on being below the threshold - on taxable pay of £49k + £3k interest there will be a HR liability of £1,230 @ 40%.

I'm just trying to work out how much to lump sum into a pension to get my tax return back to a 20% payer so I can have the interest allowance of £1000 instead of £500

OK - if your total taxable income is £52000 and you have made no contributions into your personal pension this year you need to make a contribution of £1730 gross. That is a payment by you of £1384 which is grossed up to £1730. 

You must then inform HMRC to obtain additional relief of £346, 20% of £1730. 

But give yourself some leeway!

Karen1980_Lily

[Deleted User] said:

Karen1980_Lily said:

TheSpectator said:

penners324 said:

Your DC pension will add 25%.

There's no extra to claim back. You're very close but below the 40% threshold on your salary plus interest anyway. Even if you go over the threshold it's a very small amount you could claim

Not so sure on being below the threshold - on taxable pay of £49k + £3k interest there will be a HR liability of £1,230 @ 40%.

I'm just trying to work out how much to lump sum into a pension to get my tax return back to a 20% payer so I can have the interest allowance of £1000 instead of £500

OK - if your total taxable income is £52000 and you have made no contributions into your personal pension this year you need to make a contribution of £1730 gross. That is a payment by you of £1384 which is grossed up to £1730. 

You must then inform HMRC to obtain additional relief of £346, 20% of £1730. 

But give yourself some leeway!

I have paid into my pension this year through salary sacrifice but I haven't paid any lump sums and I am below the 60K threshold.
I thought I needed to pay 10k meaning that if get the relief of between 2 and 4k?

Dazed_and_C0nfused

Karen1980_Lily said:

[Deleted User] said:

Karen1980_Lily said:

TheSpectator said:

penners324 said:

Your DC pension will add 25%.

There's no extra to claim back. You're very close but below the 40% threshold on your salary plus interest anyway. Even if you go over the threshold it's a very small amount you could claim

Not so sure on being below the threshold - on taxable pay of £49k + £3k interest there will be a HR liability of £1,230 @ 40%.

I'm just trying to work out how much to lump sum into a pension to get my tax return back to a 20% payer so I can have the interest allowance of £1000 instead of £500

OK - if your total taxable income is £52000 and you have made no contributions into your personal pension this year you need to make a contribution of £1730 gross. That is a payment by you of £1384 which is grossed up to £1730. 

You must then inform HMRC to obtain additional relief of £346, 20% of £1730. 

But give yourself some leeway!

I have paid into my pension this year through salary sacrifice but I haven't paid any lump sums and I am below the 60K threshold.
I thought I needed to pay 10k meaning that if get the relief of between 2 and 4k?

Why £10k?

The higher rate threshold is £50,270.

Personal Allowance £12,570
Basic rate band £37,700

[Deleted User]

Karen1980_Lily said:

[Deleted User] said:

Karen1980_Lily said:

TheSpectator said:

penners324 said:

Your DC pension will add 25%.

There's no extra to claim back. You're very close but below the 40% threshold on your salary plus interest anyway. Even if you go over the threshold it's a very small amount you could claim

Not so sure on being below the threshold - on taxable pay of £49k + £3k interest there will be a HR liability of £1,230 @ 40%.

I'm just trying to work out how much to lump sum into a pension to get my tax return back to a 20% payer so I can have the interest allowance of £1000 instead of £500

OK - if your total taxable income is £52000 and you have made no contributions into your personal pension this year you need to make a contribution of £1730 gross. That is a payment by you of £1384 which is grossed up to £1730. 

You must then inform HMRC to obtain additional relief of £346, 20% of £1730. 

But give yourself some leeway!

I have paid into my pension this year through salary sacrifice but I haven't paid any lump sums and I am below the 60K threshold.
I thought I needed to pay 10k meaning that if get the relief of between 2 and 4k?

As I have said you are only £1730 into higher rates - only this amount has been charged at 40%. You only to to pay as I previously stated but I would advise that you give yourself some headroom. 

Only upon this amount can you obtain additional relief of 20% (40% -20%)

TheSpectator

More importantly, what is your taxable pay on your March payslip (total to date).

It's not clear of your £49k is before or after salary sacrifice.

Karen1980_Lily

Dazed_and_C0nfused said:

Karen1980_Lily said:

[Deleted User] said:

Karen1980_Lily said:

TheSpectator said:

penners324 said:

Your DC pension will add 25%.

There's no extra to claim back. You're very close but below the 40% threshold on your salary plus interest anyway. Even if you go over the threshold it's a very small amount you could claim

Not so sure on being below the threshold - on taxable pay of £49k + £3k interest there will be a HR liability of £1,230 @ 40%.

I'm just trying to work out how much to lump sum into a pension to get my tax return back to a 20% payer so I can have the interest allowance of £1000 instead of £500

OK - if your total taxable income is £52000 and you have made no contributions into your personal pension this year you need to make a contribution of £1730 gross. That is a payment by you of £1384 which is grossed up to £1730. 

You must then inform HMRC to obtain additional relief of £346, 20% of £1730. 

But give yourself some leeway!

I have paid into my pension this year through salary sacrifice but I haven't paid any lump sums and I am below the 60K threshold.
I thought I needed to pay 10k meaning that if get the relief of between 2 and 4k?

Why £10k?

The higher rate threshold is £50,270.

Personal Allowance £12,570
Basic rate band £37,700

I thought it was only the relief that will come off of my threshold not the actual amount I pay into my pension? 
52 k total earnings
10k in pension which is 2k relief 
back down to 50k?
I must admit I found an online calculator that suggested this approach was wrong.

Karen1980_Lily

TheSpectator said:

More importantly, what is your taxable pay on your March payslip (total to date).

It's not clear of your £49k is before or after salary sacrifice.

49k taxable. 

Dazed_and_C0nfused

Karen1980_Lily said:

Dazed_and_C0nfused said:

Karen1980_Lily said:

[Deleted User] said:

Karen1980_Lily said:

TheSpectator said:

penners324 said:

Your DC pension will add 25%.

There's no extra to claim back. You're very close but below the 40% threshold on your salary plus interest anyway. Even if you go over the threshold it's a very small amount you could claim

Not so sure on being below the threshold - on taxable pay of £49k + £3k interest there will be a HR liability of £1,230 @ 40%.

I'm just trying to work out how much to lump sum into a pension to get my tax return back to a 20% payer so I can have the interest allowance of £1000 instead of £500

OK - if your total taxable income is £52000 and you have made no contributions into your personal pension this year you need to make a contribution of £1730 gross. That is a payment by you of £1384 which is grossed up to £1730. 

You must then inform HMRC to obtain additional relief of £346, 20% of £1730. 

But give yourself some leeway!

I have paid into my pension this year through salary sacrifice but I haven't paid any lump sums and I am below the 60K threshold.
I thought I needed to pay 10k meaning that if get the relief of between 2 and 4k?

Why £10k?

The higher rate threshold is £50,270.

Personal Allowance £12,570
Basic rate band £37,700

I thought it was only the relief that will come off of my threshold not the actual amount I pay into my pension? 
52 k total earnings
10k in pension which is 2k relief 
back down to 50k?
I must admit I found an online calculator that suggested this approach was wrong.

That is pretty much all wrong.

If you pay £10k then you would get £2,500 in pension tax relief.  Making a gross contribution of £12,500.  Pension tax relief is 20%, not 16.67%.

And that contribution would make no difference whatsoever to your taxable income.  That would remain £52k, £53k whatever figure you want to use.

But your basic rate band would be increased from £37,700 to £50,200.

Adding £12.5k (gross) to a pension is rarely a bad thing but it seems to bear no relation to what you are wanting to acheive.

[Deleted User]

Karen1980_Lily said:

[Deleted User] said:

Karen1980_Lily said:

TheSpectator said:

penners324 said:

Your DC pension will add 25%.

There's no extra to claim back. You're very close but below the 40% threshold on your salary plus interest anyway. Even if you go over the threshold it's a very small amount you could claim

Not so sure on being below the threshold - on taxable pay of £49k + £3k interest there will be a HR liability of £1,230 @ 40%.

I'm just trying to work out how much to lump sum into a pension to get my tax return back to a 20% payer so I can have the interest allowance of £1000 instead of £500

OK - if your total taxable income is £52000 and you have made no contributions into your personal pension this year you need to make a contribution of £1730 gross. That is a payment by you of £1384 which is grossed up to £1730. 

You must then inform HMRC to obtain additional relief of £346, 20% of £1730. 

But give yourself some leeway!

I have paid into my pension this year through salary sacrifice but I haven't paid any lump sums and I am below the 60K threshold.
I thought I needed to pay 10k meaning that if get the relief of between 2 and 4k?

Is your confusion entirely centred around your belief that there is a £60k threshold? Is child benefit an issue here?

Karen1980_Lily

[Deleted User] said:

Karen1980_Lily said:

[Deleted User] said:

Karen1980_Lily said:

TheSpectator said:

penners324 said:

Your DC pension will add 25%.

There's no extra to claim back. You're very close but below the 40% threshold on your salary plus interest anyway. Even if you go over the threshold it's a very small amount you could claim

Not so sure on being below the threshold - on taxable pay of £49k + £3k interest there will be a HR liability of £1,230 @ 40%.

I'm just trying to work out how much to lump sum into a pension to get my tax return back to a 20% payer so I can have the interest allowance of £1000 instead of £500

OK - if your total taxable income is £52000 and you have made no contributions into your personal pension this year you need to make a contribution of £1730 gross. That is a payment by you of £1384 which is grossed up to £1730. 

You must then inform HMRC to obtain additional relief of £346, 20% of £1730. 

But give yourself some leeway!

I have paid into my pension this year through salary sacrifice but I haven't paid any lump sums and I am below the 60K threshold.
I thought I needed to pay 10k meaning that if get the relief of between 2 and 4k?

Is your confusion entirely centred around your belief that there is a £60k threshold? Is child benefit an issue here?

Nope it's literally I have 2.5k interest on savings and I'm trying to avoid paying 40% on 2k ( reduced interest allowance as a 40% tax payer. I want to pay a lump sum to reduce to 20% so I get the 1k allowance and pay 20% on 1.5k