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Posted 13 days ago by Rob H
I have been paying AVCs through payroll to reduce my taxible pay to below the tax threshold where my personal allowance starts to be reduced. These payroll AVCs come out before tax. For the March payroll, I missed the cutoff (which was earlier than usual!!) so my taxible pay will be above the threshold and above my estimated earnings for this year. Question is, if I make an AVC directly to my pension provider now and then claim back any higher rate tax relief in my self assessment, will this put my taxible pay back under the threshold? Maybe a question for the Self Assessment forum but related to this, when entering this in my return. Do I only mention the amount of tax paid outside of the "pre-tax" payroll contributions as this is the only amount where extra tax relief should be considered?
Posted 4 days ago by HMRC Admin 25 Response
Hi Rob H,
It will - your pension contribution will reduce your Adjusted Net Income, and bring it under the £100,000 threshhold.
Personal Allowances: adjusted net income
You are correct, you would only declare this pension contribution amount on your return, as your AVC is already accounted for in your pay.
Thank you. 

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