Reducing tax (and avoiding the 45% and 60% bands)

bbanduser

Hi,
   My income this year (after pension contribution of $38K, including both mine and my employers contribution) is £149K. If I want to remain below the £100K taxable income, how much should I put into the pension, so that I can get back to 60% and 45% tax I have paid this year? Is it 23.75K (as that would be what I was paid after the taxes were deducted above £100K)?
Need to do this by tomorrow to avoid a huge tax bill (I have plenty of pension allowance available for the last 3 years).
All responses will be appreciated.

Nomunnofun1

To a SIPP - £49k gross. That is a physical payment by you of £39200 grossed up to £49k by HMRC. 

You inform HMRC of the gross payment to obtain the additional tax relief. 

No idea where you have arrived at 23.75k!

Dazed_and_C0nfused

Nomunnofun1 said:

To a SIPP - £49k gross. That is a physical payment by you of £39200 grossed up to £49k by HMRC. 

You inform HMRC of the gross payment to obtain the additional tax relief. 

No idea where you have arrived at 23.75k!

I suspect the op has got the mistaken idea his pension company will do something other than add basic rate relief to his net contrition.

It's a not an uncommon misconception on the Pensions board that people can get away with contributing less than the 80% as a net contribution.

bbanduser

Sorry, my thought was close to what "Dazed and Confused has said" (though I might have made some errors in calculation as well). My thought was that I had received 23.2k (of the amount above 100k), so if I contribute it back to sipp, then I'll get the 49k back (via claiming the money back from hmrc). 
So what yoire saying is that I need to get the amount below  (or at) 100k with basic tax rate, and claim the rest back from hmrc later - is that correct? And i can fo that in the next tax year, correct?

Dazed_and_C0nfused

bbanduser said:

Sorry, my thought was close to what "Dazed and Confused has said" (though I might have made some errors in calculation as well). My thought was that I had received 23.2k (of the amount above 100k), so if I contribute it back to sipp, then I'll get the 49k back (via claiming the money back from hmrc). 
So what yoire saying is that I need to get the amount below  (or at) 100k with basic tax rate, and claim the rest back from hmrc later - is that correct? And i can fo that in the next tax year, correct?

Whatever you contribute is always (with relief at source contributions) 80% of the gross contribution.  There is no other % option.

You cannot make contributions in one tax year and get relief against another tax year.  So if you pay after 5 April then it is a 2025-26 contribution, not one for 2024-25.

bbanduser

Sorry for my comment not being clear. What i meant was I'll contribute this year (the 39.2k) and claim back the additional amounts in the next tax year. Hope that is accurate. Thanks for getting me to see sense!

Nomunnofun1

bbanduser said:

Sorry for my comment not being clear. What i meant was I'll contribute this year (the 39.2k) and claim back the additional amounts in the next tax year. Hope that is accurate. Thanks for getting me to see sense!

Yes - the claim would still be for 2024/25 but could only be made next tax year which starts on Sunday.