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Where Taxpayers and Advisers Meet

Personal pension contribution

vaibhav1608
Posts:1
Joined:Tue Mar 19, 2019 7:00 am
Personal pension contribution

Postby vaibhav1608 » Tue Mar 19, 2019 7:03 am

Hi,

My employer seems to have used an incorrect tax code and hence have deducted slightly less tax from my salary

I was wondering if I can make some personal contribution to my pension and reduce my taxable salary to be in line with the actual tax that I have paid for the year.

Can you please advice if this is possible ?

Regards,
Vaibhav

D&C
Posts:61
Joined:Thu Dec 22, 2016 10:04 pm

Re: Personal pension contribution

Postby D&C » Tue Mar 19, 2019 10:48 pm

Could you enlighten us with the tax year in question?

But realistically the answer is no you cannot do what you want. But you probably do something similar which will achieve the same end result.

Contributions to a personal pension do not usually reduce your taxable income and even if they did it wouldn't alter the taxable salary you were paid, that is a fact as reported by your employer.

Personal pension contributions are usually paid as a "relief at source" contribution so for example you have over £800 to the pension company, they add £200 tax relief (courtesy of HMRC) meaning you have £1,000 in your pension fund.

This doesn't it reduce your taxable income in any way whatsoever. But it does increase the amount of your basic rate tax band which can in turn reduce any higher rate tax payable. And in Scotland it can increase your basic rate band reducing any intermediate (and potentially higher rate) tax payable.


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