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

bbanduser
Posts: 77 Forumite


in Cutting tax
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.
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.
0
Comments
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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!1
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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!
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.0 -
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?0 -
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?
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 2024-25.0 -
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!0
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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!1
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