Getting back my personal allowance

[mss2411]

Hi all,
Got a tricky situation so late in the tax year...Trying to preserve my tax code for next year.

Had a bonus payment this month giving me a grand total income this year of £141216, I'm part of the company GPP and the pension contributions are £8228 paid by my company and £2552 paid by me. Also in my private pension i've paid £12550 (including tax relief at 20%) this year.

So from what I can work out I can take the £2552 number and add the 20% contribution giving me £3062 and add to the £12550 giving me a total of £15612.

Questions:
Does the £8228 company contribution reduce my allowable income or used in any other way?

If I do have this gap of around 25k am I looking at a 20k contribution to my private pension as the way forward?

Any clarity would be welcome.

[someone]

I don't think the 8228 company contribution has any effect on your taxable income. However, it does count towards the maximum you can pay into your pension.

By eye it looks like your total pension contribution will be around 50K - which will only be work if you have unused allowances from previous years.

I don't think you'll quite hit the pension allowance tapering so you'll have to full 40K available but that's the bit I'm struggling with at the moment. It might depend on whether the 2552 is part of a salary sacrifice or is included in the 141216. If you don't have any unused allowances from previous years then the maximum pension calculation is tricky, especially in advance of the end of the tax year when you might not know things like interest paid on accounts, P11D values etc!

[mss2411]

Thanks for this, I have some overhang from last years allowance to enable me to pay more than the 40k yearly pension allowance in this year. Savings income isn't a consideration for me.

An alternative I thought would be to use the £2552 to reduce the total taxable (income) pay down to £138,664 minus the 12550 leaves £26114 so pushing 21k + 20% relief should do it. But more than happy to have feedback on this approach.

[someone]

The number you use for your pension contribution is the amount that ends up in your pension. If your 2552 was via net pay (probably but not definitely) then that's the amount that was added to your pension and that's the amount that your taxable income reduces by.

If it was via relief at source then the pension company will have reclaimed an additional 25% (20% of the total amount, not 20% of what you pay in) and so you'd use 3190 (not 3062).

You can ring up the pension company to confirm how much you have paid in this year so far. (They will eventually send you a statement but, unfortunately, this will never arrive in time to make decisions at the end of the tax year)

(Note that I might have all this wrong - rely on it at your own risk)

Total pay 141216
less 2552
less 12550
==========
126114

To reduce this to 100000 you need to pay 20892 via relief at source (which will gross up to 26115)

One thing to watch out for, if the 2552 is paid by salary sacrifice then it will already have been deducted from your total pay (as appears on your March payslip) and so cannot be deducted again when calculating how much tax you will pay.

Total pension contributions 49445 - so you will need 10K of carry back.

And assuming the 2552 is paid by salary sacrifice (not true in the calculation I've done above) then your effective pay (forget the term HMRC use) for calculating your annual allowance is 141216+2552+8228 = 151996 (so your annual allowance this year will be 39K, not 40K (but your threshold pay is, (I think) 151996-49445 = 102551, so perhaps you don't lose any annual allowance anyway.) - Personally, I think this ability to use carry back to reduce your threshold pay is somewhat weird and appears to run counter to the intent of the reduction in annual allowance. Everything I've seen suggests it really does work this way but I wouldn't be comfortable relying on it without expert advice. If you have enough allowance available from previous years then you can worry about this precise detail when you come to do your tax and don't need the details right now.

[mss2411]

Many thanks for the detail in the response, the 2552 is indeed Gross so can use the 3190 figure as you say. I'll use my previous years allowance. Its a fair chunk to dump into my pension, but in truth I think I need to 'catch up' anyway.

Thanks again!!