40% tax

Alitree

Hi All 
A recent pay rise has shifted me into the 40% tax bracket, the problem for me is as im drawing a private pension all of that income is taxed at 40% my pay rise took me to £51306 pa but now costs me an extra £200 in tax. question is can i put more into another pension with my current work to offset that . i know i can only put 10k in a year but don't believe i am near that. any thoughts?

Nomunnofun1

If your total taxable income is indeed £51306 you will be paying 40% on £1036 of income. 

A contribution of £829 by you  to a SIPP (grossed up to £1036) will increase the amount that you can receive before paying 40% to £51306. 

Hopefully you will give yourself some leeway.

Where does the ‘can only pay in £10000 per year’ come from?

eskbanker

Nomunnofun1 said:

Where does the ‘can only pay in £10000 per year’ come from?

MPAA presumably?

Alitree

MPAA i believe 

Alitree

Nomunnofun1 said:

If your total taxable income is indeed £51306 you will be paying 40% on £1036 of income. 

A contribution of £829 by you  to a SIPP (grossed up to £1036) will increase the amount that you can receive before paying 40% to £51306. 

Hopefully you will give yourself some leeway.

Where does the ‘can only pay in £10000 per year’ come from?

Nomunnofun1 said:

If your total taxable income is indeed £51306 you will be paying 40% on £1036 of income. 

A contribution of £829 by you  to a SIPP (grossed up to £1036) will increase the amount that you can receive before paying 40% to £51306. 

Hopefully you will give yourself some leeway.

Where does the ‘can only pay in £10000 per year’ come from?

Yes and 40% of £900 a month pension

Alitree

Nomunnofun1 said:

If your total taxable income is indeed £51306 you will be paying 40% on £1036 of income. 

A contribution of £829 by you  to a SIPP (grossed up to £1036) will increase the amount that you can receive before paying 40% to £51306. 

Hopefully you will give yourself some leeway.

Where does the ‘can only pay in £10000 per year’ come from?

Thanks
could i pay that amount into my work pension monthly i.e. an extra £70 per month?

Isthisforreal99

Alitree said:

Nomunnofun1 said:

If your total taxable income is indeed £51306 you will be paying 40% on £1036 of income. 

A contribution of £829 by you  to a SIPP (grossed up to £1036) will increase the amount that you can receive before paying 40% to £51306. 

Hopefully you will give yourself some leeway.

Where does the ‘can only pay in £10000 per year’ come from?

Thanks
could i pay that amount into my work pension monthly i.e. an extra £70 per month?

If they let you pay additional amounts. Is it a DB or DC pension?

Alitree

Isthisforreal99 said:

Alitree said:

Nomunnofun1 said:

If your total taxable income is indeed £51306 you will be paying 40% on £1036 of income. 

A contribution of £829 by you  to a SIPP (grossed up to £1036) will increase the amount that you can receive before paying 40% to £51306. 

Hopefully you will give yourself some leeway.

Where does the ‘can only pay in £10000 per year’ come from?

Thanks
could i pay that amount into my work pension monthly i.e. an extra £70 per month?

If they let you pay additional amounts. Is it a DB or DC pension?

I can pay in extra per month if i want and i think its a DC one

Cobbler_tone

Must be DC as wouldn’t have triggered MPAA otherwise.

Isthisforreal99

Cobbler_tone said:

Must be DC as wouldn’t have triggered MPAA otherwise.

Except that the continuing employment and pension they are contributing to is maybe a different pension to the one in payment.

ColdIron

Alitree said:

question is can i put more into another pension with my current work to offset that

Yes. You can pay into a SIPP or your current pension (if it's a defined contribution one) and HMRC will increase your basic rate band (£37,700) by the amount of the gross contribution (includes your contribution and 20% basic relief). So if you contribute £1,000 your £37,700 will become £38,950 (£37,700 + £1,250) effectively raising the £50,270 threshold to £51,520