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  • RE: One-off pension contribution paid from bank in Self Assessment

    Thanks , perhaps my question wasn’t clear. No doubt about the net pay relief. I was referring to the scenario where the salary was paid and then put back into workplace pension from bank. This is not getting the full relief >>> “But because I had received this amount into bank , paying £5000 results in my pension going up by £6250, and get £1250 in self assessment relief, totalling to £7500, which is lesser than £8333. So that means I didn’t get 100% tax relief by paying into pension? (my assumption is that we get 100% relief for payments into pension)”
  • RE: One-off pension contribution paid from bank in Self Assessment

    Thanks for your reply & explanation. So based on the above example , putting £5000 of post-tax net pay salary from bank, into pension got total £2500 tax relief. (£1250 via self assessment and £1250 claimed by pension provider) However £5000 pre-tax (@ 40%) would be (£5000x10/6) = £8333 gross. If I had paid £8333 via the ‘Net pay’ method into workplace pension , my pension would have gone up £8333 , and £0 tax on this amount . But because I had received this amount into bank , paying £5000 results in my pension going up by £6250, and get £1250 in self assessment relief, totalling to £7500, which is lesser than £8333. So that means I didn’t get 100% tax relief by paying into pension? (my assumption is that we get 100% relief for payments into pension)
  • RE: One-off pension contribution paid from bank in Self Assessment

    Hello , I have run this scenario through the HMRC Tax calculation summary notes (HMRC 12/22 SA110 Notes 2022-23) , the template which helps calculate tax due step by step. This document does not seem to align with the HMRC advice provided above. I feel it is because of the below 2 points : - tax due is calculated on “Total Taxable Income”(£131k) , and not on “Net Adjusted Income”(£124750) - Also , the calculation increases my basic rate limit by the one off pension contribution (£6250), to £43950 (in the document as S3 + A119). This does not make sense as the pension contribution should be tax free, but the calculation is taxing 20% on the amount paid into pension - isn’t this double taxing ? Based on the above, can we check if the document is correctly calculating tax, for this scenario of one-off pension contributions paid into work place pension ( from after-tax net pay ), from my bank. (Note: The £6250 includes the 20% topped up by pension provider)
  • RE: One-off pension contribution paid from bank in Self Assessment

    Hi , my original post is still shown as pending moderator review! Would appreciate if this could be processed so I can share with my tax consultant as well
  • One-off pension contribution paid from bank in Self Assessment

    WarningThis post is currently being moderated and will be visible when it has been approved by a HMRC moderator.