Salary sacrifice and carry forward

222Johnny222

I appreciate I have asked a similar question previously but I just want to sanity check something.

(these numbers are rounded for ease)

salary £105,000
employer contributions £6,000

i am via salary sacrifice paying in £57,000 pa (54%)
so with employer contributions I am at £63,000 pa

so taxable income is £48,000

Am I correct in saying I can contribute this percentage via salary sacrifice?

i have plenty of roll over from previous three years.

second query is how will HMRC know what my level of salary sacrifice was in the last three years?
Scottish widows won’t know as pension was with RL three years ago.

do SW and RL tell HMRC what my payments were or do my employers?

I believe that I don’t need to do anything by of declaring the excess of £60,000 and somehow it gets sorted.

can someone reassure me - I don’t do tax returns

thanks in anticipation 

Dazed_and_C0nfused

222Johnny222 said:

I appreciate I have asked a similar question previously but I just want to sanity check something.

(these numbers are rounded for ease)

salary £105,000
employer contributions £6,000

i am via salary sacrifice paying in £57,000 pa (54%)
so with employer contributions I am at £63,000 pa

so taxable income is £48,000

Am I correct in saying I can contribute this percentage via salary sacrifice?

i have plenty of roll over from previous three years.

second query is how will HMRC know what my level of salary sacrifice was in the last three years?
Scottish widows won’t know as pension was with RL three years ago.

do SW and RL tell HMRC what my payments were or do my employers?

I believe that I don’t need to do anything by of declaring the excess of £60,000 and somehow it gets sorted.

can someone reassure me - I don’t do tax returns

thanks in anticipation 

You seem a bit confused. 

You won't be contributing anything to a pension.  You are agreeing to a reduced salary in return for additional employer contributions.

You don't get any pension tax relief added with employer contributions, you are avoiding paying tax (and NI) on the amount sacrificed.

It is entirely your responsibility to make sure you don't exceed the annual allowance available to you.  

NMW is normally the thing that limits salary sacrifice and you are clearly still well above that even if you are working above average hours.

kermchem

The beauty of salary sacrifice is that to the outside world, i.e., HMRC, your salary is £48K. My employer’s HR department have a standard letter that they can send to a mortgage provider that would have £105K on it. 

222Johnny222

Dazed_and_C0nfused said:

222Johnny222 said:

I appreciate I have asked a similar question previously but I just want to sanity check something.

(these numbers are rounded for ease)

salary £105,000
employer contributions £6,000

i am via salary sacrifice paying in £57,000 pa (54%)
so with employer contributions I am at £63,000 pa

so taxable income is £48,000

Am I correct in saying I can contribute this percentage via salary sacrifice?

i have plenty of roll over from previous three years.

second query is how will HMRC know what my level of salary sacrifice was in the last three years?
Scottish widows won’t know as pension was with RL three years ago.

do SW and RL tell HMRC what my payments were or do my employers?

I believe that I don’t need to do anything by of declaring the excess of £60,000 and somehow it gets sorted.

can someone reassure me - I don’t do tax returns

thanks in anticipation 

You seem a bit confused. 

You won't be contributing anything to a pension.  You are agreeing to a reduced salary in return for additional employer contributions.

You don't get any pension tax relief added with employer contributions, you are avoiding paying tax (and NI) on the amount sacrificed.

It is entirely your responsibility to make sure you don't exceed the annual allowance available to you.  

NMW is normally the thing that limits salary sacrifice and you are clearly still well above that even if you are working above average hours.

Thanks.
it was more my query re exceeding the £60,000 and using roll over.
Does HMRC have a record over the previous three years from either my employer or pension provider or do I need to tell them and which year I think should be used in order to allow the extra £3,000?

Dazed_and_C0nfused

222Johnny222 said:

Dazed_and_C0nfused said:

222Johnny222 said:

I appreciate I have asked a similar question previously but I just want to sanity check something.

(these numbers are rounded for ease)

salary £105,000
employer contributions £6,000

i am via salary sacrifice paying in £57,000 pa (54%)
so with employer contributions I am at £63,000 pa

so taxable income is £48,000

Am I correct in saying I can contribute this percentage via salary sacrifice?

i have plenty of roll over from previous three years.

second query is how will HMRC know what my level of salary sacrifice was in the last three years?
Scottish widows won’t know as pension was with RL three years ago.

do SW and RL tell HMRC what my payments were or do my employers?

I believe that I don’t need to do anything by of declaring the excess of £60,000 and somehow it gets sorted.

can someone reassure me - I don’t do tax returns

thanks in anticipation 

You seem a bit confused. 

You won't be contributing anything to a pension.  You are agreeing to a reduced salary in return for additional employer contributions.

You don't get any pension tax relief added with employer contributions, you are avoiding paying tax (and NI) on the amount sacrificed.

It is entirely your responsibility to make sure you don't exceed the annual allowance available to you.  

NMW is normally the thing that limits salary sacrifice and you are clearly still well above that even if you are working above average hours.

Thanks.
it was more my query re exceeding the £60,000 and using roll over.
Does HMRC have a record over the previous three years from either my employer or pension provider or do I need to tell them and which year I think should be used in order to allow the extra £3,000?

It is purely your responsibility to keep those records.  HMRC will doubtless have information from lots of places, including any pension companies who have received personal, employee or employer contributions relating to you.

But all the onus is on you.  You keep your own records and have to tell HMRC if you have an annual allowance tax charge to pay.  Which you seem confident isn't the case with having plenty of carry forward available.

Albermarle

222Johnny222 said:

Dazed_and_C0nfused said:

222Johnny222 said:

I appreciate I have asked a similar question previously but I just want to sanity check something.

(these numbers are rounded for ease)

salary £105,000
employer contributions £6,000

i am via salary sacrifice paying in £57,000 pa (54%)
so with employer contributions I am at £63,000 pa

so taxable income is £48,000

Am I correct in saying I can contribute this percentage via salary sacrifice?

i have plenty of roll over from previous three years.

second query is how will HMRC know what my level of salary sacrifice was in the last three years?
Scottish widows won’t know as pension was with RL three years ago.

do SW and RL tell HMRC what my payments were or do my employers?

I believe that I don’t need to do anything by of declaring the excess of £60,000 and somehow it gets sorted.

can someone reassure me - I don’t do tax returns

thanks in anticipation 

You seem a bit confused. 

You won't be contributing anything to a pension.  You are agreeing to a reduced salary in return for additional employer contributions.

You don't get any pension tax relief added with employer contributions, you are avoiding paying tax (and NI) on the amount sacrificed.

It is entirely your responsibility to make sure you don't exceed the annual allowance available to you.  

NMW is normally the thing that limits salary sacrifice and you are clearly still well above that even if you are working above average hours.

Thanks.
it was more my query re exceeding the £60,000 and using roll over.
Does HMRC have a record over the previous three years from either my employer or pension provider or do I need to tell them and which year I think should be used in order to allow the extra £3,000?

No you do not need to do anything, except keep good records, in case HMRC ask any questions.

I presume they do get info from pension providers. How closely they check it all I have no idea.

222Johnny222

Thank you both.

Marcon

222Johnny222 said:

i have plenty of roll over from previous three years.

In case anyone reads this thread and starts trying to research 'roll over', try looking for 'carry forward' instead! The former is more of a National Lottery bit of terminology...