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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4995
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I have a quick question regarding a UK tax calculation

Resolved Question:

Hi
I have a quick question regarding a UK tax calculation for 2014/2015 which I'm trying to do in regard to reducing my taxable income below £100k. Essentially, I need to figure out how much to pay into my SIPP to get maximum benefit i.e. avoid tapering of the personal allowance. I just need someone to confirm my calculations are correct.
Thanks
Mark
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.
Hello and welcome to the site. Thank you for your question.

Please let me the figures and I will confirm your figures
I can't open the link

Many thanks
Customer: replied 2 years ago.

Hi

for the 2014/2015 tax year so far my last payslip shows:

taxable pay 108,897

tax paid 34,142

tax code 651L (should be 760L - reclaiming the £1066 child benefit owed for 2013/14)

Unfortunately, HMRC don't seem to have the 2014/2015 self assessment calculator online right now or I'd check through that.

I'm married but in 1990 so no married allowance there and assuming no other significant allowances.

I want to reduced my tax liability so that I don't lose my personal allowance due to taper.

From my calculations it would appear that I should pay (gross) £8897 into a SIPP (i.e. £6608 net.) to reduce my table pay to £100k and hence avoid any tapering.

If I ignore the tax code for a moment and assume a personal allowance of £10k, I can then claim a tax refund of £4515 and a pension payment refund of £1779.

So total reclaim would be £5228 ( £4515 - £1088 + £1779 )

Hope that's clear.

Just need to know that that is correct before I go and put £6608 into my pension.

Thanks

Mark

Expert:  taxadvisor.uk replied 2 years ago.
Mark, thank you for your reply and for additional information..

You are corect in your thinking and calculations..
If I were you and was able to find a little more, I would make a gross contribution of £10,000 and not £8,900.

You would not get a better return on additional £1,100 of gross contribution.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Hi.

OK. That's good to know. Thanks for that.

I could make it up to 10k. Could I ask you for the logic given, I assume, I only need to pay-in the £8900 to avoid any taper?

Thanks

Mark

Expert:  taxadvisor.uk replied 2 years ago.
Mark, thank you for your reply.

This is a logic of a trained accountant and one who looks for better returns on hard earned money.

Best wishes.
Customer: replied 2 years ago.

Hi

Smile I've already paid a lump in anyway so I think with the extra that'll be more than enough.

Many thanks

Mark

Expert:  taxadvisor.uk replied 2 years ago.
Mark, thank you for your reply.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

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