Have Tax Questions? Ask a Tax Expert for Answers ASAP
I am currently in full time work but due to the company freezing my DB pension scheme and starting a new DC scheme, I decide to take my DB pension a year early and invest this to try and make up the shortfall in the frozen DB scheme.
I now receive a salary and DB pension but have elected to enrol into the new company DC scheme. However I intend to pay £2000 a month from my salary into this new scheme but hope this £2000 is non taxable at source.
Apologies if I have not explained this very well !!
The whole things seems to confuse my payroll company. HMRC sent me a new tax code of D0 on all my earnings, I rang to query this and they admitted a mistake and this should have only applied to my pension earnings. I then explained my situation on continuing to pay into the new DC scheme, they said they would re evaluate my taxes code in writing. I then received a new tax code of 1400L, which according to my calculation would result in a tax under payment of £750 year taking into account salary and pension received, assuming i was entitled to tax relief on my £2000 DC contribution.
After contacting my payroll company they now are querying whether my £2000 DC contribution is liable relief, hence my question here today.
Obviously I am no tax expert, but as I understand the rules, as long as I am not re-investing my pension into the DC scheme, which is not the case as this goes into savings, my normal salary is taken DC scheme.
My monthly salary before tax is £3900 my pension is £1455, from my salary I hope to pay £2000 into the DC scheme but can only afford to do so if this does not become part of my taxable salary. I have requested to talk with the payroll tax (expert) to get some clarity, I have also spoken with HMRC but they talk in a very technical way and I am not always sure we are talking about the same situation. My hope is that I get some guidance from you to see if I am on the right track on all this.
I thinks as long as I do not exceed the maximum allowable contribution I am eligible relief at source DC scheme ?
Apologies amount of time taken over this, but my plans in 2016 hinge on my DC scheme contributions.
"taxable emoluments" ?
Time to sort out the payroll company now !!