Loss of personal Allowance

[spiker]

Hi all,
A bit of a complicated one here.

For tax year 16/17 my salary was £86k, however I received a one off payment of £62k on top of this.
Therefore total income for the year was £148k, this causes me to lose my personal allowance and therefore i owe back 40% (over 4k).


I want to donate £6000 to a charity.
How much extra would I have to add to my pension fund to bring my taxable earnings back down to 100k and therefore not lose the personal allowance?

[Lambs]

S,

I assume that the £6,000 charitable donation will rank for Gift Aid, and will therefore 'count' as a donation of £7,500 for tax purposes (having been "grossed up" by 5/4 to represent the Basic Rate tax deducted at source).

You will then need a further £32,400 pension contribution (again, this is the net amount you would need to pay out of your bank account, but would "count" as a payment of £40,500) to get the full amount of your PA back in 2016/17.

You can fiddle around with the figures in our calculator at

http://taxationweb.azurewebsites.net/Pe ... Calculator?

which provides for the various adjustments you might want to make.

Kind regards,

Lambs

[Lambs]

ps - you won't need your "tax deducted" figure from your payslips in order to check the Personal Allowance position but, when you do have it, if you re-run the calculation, then you should get an idea of any repayment due, etc.

Lambs

[spiker]

Thanks.
Don't fancy paying 32k into my pension fund. I presume there are no other alternatives other than 'gift aid' and 'pension' contributions?

I might just have to take the hit on the £4000. I can probably make the £4000 back in a year by investing the 32k