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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I'm having to fill in a tax return due to my salary being

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Hi , I'm having to fill in a tax return due to my salary being above 50K and the fact that I get child allowance. I get paid monthy and pay into a pension scheme via salary sacrifice. Assuming the pension company claims 20% relief on the payment, the question I have is how do I put this down on the online submission such that I can get the additional tax relief on my pension payment?
Hi. Does the pension contribution appear on your monthly payslip? Is the pension scheme a personal scheme you set up or a company scheme?
Customer: replied 2 years ago.
Hi, the pension appears on the monthly payslip. The pension scheme is a company scheme.
Customer: replied 2 years ago.
are you still online?
You would only put the gross pension payment in your tax return in box 3 on page 3 of the SA100 form if the payment was not deducted from your pay before the tax was calculated. The SA100 is here:
You need to find out from your employer's payroll section if you have had the tax relief at source. If that's the case, then your gross pay as showm on your P60 will be exclusive of those payslip pension contributions.
I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
I'd like to discuss this but can you clarify whether the £38 payment for telephone is just an additional £2 or if it is an additional £38 on top of the £36?
Let me check and I'll come back to you. Do not accept any offer that may come through or you will be charged.
Customer: replied 2 years ago.
ok thanks
I can pick a lower figure but it is on top of what you have paid for the original question. In any event, I cannot call for an hour or so as I'm about to go into a meeting. Could I call you at around 5.30pm? Let me know what you think. Alternatively, scan and send your payslip to me using the paperclip icon.
Customer: replied 2 years ago.
I'd prefer to talk but worried about paying any more. Will send a copy of payslip
OK. Let me take a look at the payslip and I'll get back to you.
Your pre-pension gross is £4,000 per month. Your post pension gross is £3,800 per month or £45,600 per annum. Add the car benefit of £3,246 and the medical insurance benefit of £1,178 and your gross for tax purposes is £50,024 on which you have paid £9,605.00 in tax.
If you input the £50,024 into the calculator (link below) you will see that you have paid pretty much the correct amount of tax which means that the pension contribution has been taken off your pay each month before the tax has been calculated.
Usually, a salary sacrifice is then paid over by your employer to the pension scheme as a company contribution and it is the company which gets the tax relief, you having not paid tax on the amount sacrificed in the first place. Your employer's payroll people would tell you if thats the case. In effect, a true salary sacrifice is salary you gave up in exchange for a company contribution of an equal amount to your pension scheme.
Had the £2,400 not been deducted before the tax was calculated, your gross pay on the P60 would have been £52,424 (£50,024 + £2,400).
Customer: replied 2 years ago.
Forgive me for not getting this staight where is the benefit for me in doing a salary sacrifice. How do I get the additional relief, as a higher rate tax payer, on the payments I am making towards the pension?
No problem.
Your income in 2014/15 was more than £41,865, above which you pay tax at 40%. You paid tax on £50,024. Some of that was taxed at 40%, £8,159 to be precise.
Your pension contribution which was really a salary sacrifice was taken off your monthly pay each month before the tax deduction was calculated so you have effectively had tax relief at 40% on £2,400 by not paying the tax (£960) initially.
Had you made the pension contribution from your bank into a personal pension scheme, you would have paid £960 in tax on the £2,400 salary (and NIC as well). You would have paid £1,920 (£160 per month) into your pension plan and HMRC would have claimed back £480 from HMRC making a total of £2,400 sitting in your pension plan.
You would have then claimed an extra £480 in tax relief via your tax return (£2,400 @ 40% - £480 tax relief at source) so your total tax relief would have been £960 which is equal to the tax you didn't pay by sacrificing £2,400 in salary, all of which ended up in your pension plan.
Customer: replied 2 years ago.
OK. In that case on my self assessment tax return I guess I shouldn't be filling any of the boxes which refer to Tax reliefs and pension payments?
That would be correct so long as the £200 was deducted from your gross pay each month before the tax on the balance of your month's pay was calculated which according to my analysis of your payslip was the case.
Customer: replied 2 years ago.
Great. Clear as mud. I get the gist but it seems a complicated way of doing it. Thanks very much for your help and patience. I'll submit my return and hope the numbers don't come out with me having to pay too much additional tax due to child allowance. Thanks again.. Jon
Thanks and good luck.
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