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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4790
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I am a 40%taxpayer earing basic of £48,000 + bonuses which

Customer Question

I am a 40%taxpayer earing basic of £48,000 + bonuses which come out at £62,250 gross. I have paid £14,827 in deductions this past year. I am having to take my navy pension which after 40% tax comes in at £175/month. I am on salary sacrifice for my pension currently on 6.5%. What do I need to do to get down to being under the 40% tax threshold and would it be worth doing?
Thank You.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello Ray, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Options are very few for people like you and me in this position. About the only way to reduce your tax bill would be to make payments to a private pension scheme, but now there are strict limits laid down and with your navy pension pot you might be close to the lifetime allowance and you might need to seek protection. The best adviser on this is The Forces Pensions Society of which I trust you are a member. Contributions to pension funds may not exceed 40K in the current tax year, 45K last tax year and includes employer's contributions. You can go back three years to mop up unused contribution levels, but after that your options are severely limited. I am so sorry to have to rain on your parade.
Customer: replied 1 year ago.
I am not paying into any other pension apart from my company one. I have a lump sum from my previous pensions in a g/teed min 4% account and a frozen final salary pension which io was only in for 3 years. The bonuses are not g/teed and the P60 I gave info from was for last tax year. Is there no way I can get into the 20% tax band with being so close to it. I rekon if I aary sacrificed 16% of my salary this could get me there including what I am receiving in pension is this correct.
Expert:  bigduckontax replied 1 year ago.
Pension contributions off the only escape and whichever way you turn you will be affected by the limits I set out in my original answer. Ths pensions route for tax reduction is rapidly running out of steam.